Problem: Consider the following project cash flows:
Year ......................Project A...........Project B
0 investment.............-$200..............-$300
1...................................60..................200
2...................................70..................100
3...................................80..................100
4...................................80
1. Calculate the NPV of each project. Which project should be chosen if opportunity cost is 11%?
2. What are the internal rates of return on projects A and B?