Business, 06.12.2019 20:31 hnsanders00

Consider two projects: project a currently costs $15 million, which is to be paid this year. the returns are $12 million after in one year and $11 million in two years. project b currently costs $13 million, again to be paid this year. the returns are $10 million after in one year and $8 million in two years.

at an interest rate of 6%, the net present value of project a is roughly , while the net present value of project b is roughly .

suppose investing in one project eliminates the opportunity to invest in the other. if the interest rate is 6%, project is preferable.

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Consider two projects: project a currently costs $15 million, which is to be paid this year. the re...