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2. Consider the following cash flows on two mutually exclusive projects: The cash flows of project...

2. Consider the following cash flows on two mutually exclusive projects: The cash flows of project A are expressed in real terms while those of Popject B are expressed in nominal terms. The appropriate nominal discount rate is 11 percent and the inflation rate is 4 percent. Which project should you choose?
Project A (real cash flow) Project B (nominal cash flow)
Year
0            (67,000)                 (74,000)
1             34,000                  34,000
2             37,000                  45,000
3             23,000                  29,000
Discount rate 　 　
NPV 　 　

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jeff jeffy answered 7 months ago
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