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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