Asked Feb 6, 2020

The following are the cash flows of two projects:


Year Project A Project B
0 $ (400 ) $ (400 )
1   230     300  
2   230     300  
3   230     300  
4   230        


a. Calculate the NPV for both projects if the discount rate is 10%. (Do not round intermediate calculations. Round your answers to 2 decimal places.)






b. Suppose that you can choose only one of these projects. Which would you choose?



  • Project B
  • Project A
  • Neither



Expert Answer

1 Rating
Step 1


 NPV for Project A and project B is $329.07 and $346.06.

 Computation of NPV:

 Excel spread sheet:

Finance homework question answer, step 1, image 1

Step 2

Excel workings:

Finance homework question answer, step 2, image 1


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