Calculate the project cash flow generated for Project A and Project B using the NPV method.
- Which project would you select, and why?
- Which project would you select under the payback method? The discount rate is 10% for both projects.
- Use Microsoft® Excel® to answer.
- Note that a similar problem is in the textbook in Section 5.1.
Sample Template for Project A and Project B:
Initial Investment Year 1 year 2 year 3
Project A (10,000) 5,000 5,000 5,000
Project B (55,000) 20,000 20,000 20,000
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