Explain an initial outflow


Projects A and B both have an initial outflow of $100,000. Project A will return a cash flow of $30,000 each year for the next 5 years. Project B will return $40,000 in year 1, $30,000 in year 2, $30,000 in year 3, $30,000 in year 4 and $20,000 in year 5. Which project will have the higher net present value?

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Accounting Basics: Explain an initial outflow
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