Good old xyzorp theyre back is considering two mutually


Good old XYZorp (they're back) is considering two mutually exclusive projects, A & B in order to expand their product line. After letting the cost accountants out of their cages, it was determined that project A's initial investment must be $42,400, while project B will cost $60,000. Project A has projected cash inflows of $25,000 per year for three years. Project B's inflows are more variable: $10,000 in year 1; $30,000 in year 2; and $40,000 in its final year. The firm's cost of capital is 12%. YES - this IS important! Using NPV analysis, if the NPV for project? B = + $ 1,320 (yes, I did the computation for you), which project do you prefer In other words - which project will have the higher NPV.

Request for Solution File

Ask an Expert for Answer!!
Financial Management: Good old xyzorp theyre back is considering two mutually
Reference No:- TGS02812662

Expected delivery within 24 Hours