Year Project A Project B 0     –$ 51,000     –$ 66,000   1     31,000     30,000    2     26,000     39,000   3      21,000     42,000        The cash flows of Project A are expressed in real terms, whereas those of Project B are expressed in nominal terms. The appropriate nominal discount rate is 14 percent and the inflation rate is 5 percent.    Calculate the NPV for each project. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)     Project A NPV: Project B NPV:

Question
Year Project A Project B
0     –$ 51,000     –$ 66,000  
1     31,000     30,000  
 2     26,000     39,000  
3      21,000     42,000  
 

  

The cash flows of Project A are expressed in real terms, whereas those of Project B are expressed in nominal terms. The appropriate nominal discount rate is 14 percent and the inflation rate is 5 percent.

  

Calculate the NPV for each project. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

 

 

Project A NPV:

Project B NPV:

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