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Finding the NPV?
10. Yong Importers, an Asian import company, is evaluating two mutually exclusive projects, A and B. The relevant cash flows for each project are given in the table below. The cost of capital for use in evaluating each of these equally risky projects is 10 percent.
Project A Project B Initial Investment $350,000 $425,000 Year Cash Inflows (CF) 1 $140,000 $175,000 2 165,000 150,000 3 190,000 125,000 4 100,000 5 75,000 6 50,000 The NPVs of projects A and B are ________. A) $95,066 and $56,386, respectively. B) $56,386 and $95,066, respectively. C) -$56,386 and -$95,066, respectively. D) none of the above. |
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