Calculate the project cash flow generated for Project A and…
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 prepare your answer.
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