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JPMorgan Chase is considering the following mutually exclusive projects: A, B, C, D, and E with...

JPMorgan Chase is considering the following mutually exclusive projects: A, B, C, D, and E with the following cash flows:

A: Initial Investment = -$15,000, Year 1 = $20,000, Year 2 = $25,000

B: Initial Investment = -$10,000, Year 1 = $14,000, Year 2 = $20,000

C: Initial Investment = -$12,000, Year 1 = $18,000, Year 2 = $15,000

D: Initial Investment = -$13,000, Year 1 = $22,000, Year 2 = $12,000

E: Initial Investment = -$20,000, Year 1 = $30,000, Year 2 = $15,000

JPMorgan Chase has a cost of capital of 14% p.a. and all these projects are of similar risk. JPMorgan Chase is not capital-rationed. Which project should JPMorgan Chase invest in if they are using the NPV criterion?

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jeff jeffy answered 2 years ago
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