Homework 4
Year Project A Project B 0 −$360 −$360 1 190 260 2 190 260 3 190 260 4 190 a.If the opportunity cost of capital is 12%, calculate NPV for both projects? (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Project
NPV
A
$ 217.10
B
264.48
b.
Which of these projects is worth pursuing?
Both
Explanation:
b.Both projects are worth pursuing. The following are the cash flows of two projects: Year Project A Project B 0 −$240 −$240
1
120
140
2
120
140
The following are the cash flows of two projects:
