In: Finance
Which project should D&A should pick?
Project A:
| 
 t  | 
 0  | 
 1  | 
 2  | 
 3  | 
 4  | 
 5  | 
 6  | 
 7  | 
 8  | 
 9  | 
 10  | 
| 
 CF  | 
 10,000  | 
 -55,000  | 
 155,000  | 
 125,000  | 
 119,000  | 
 113,500  | 
 201,500  | 
 123,000  | 
 -119,000  | 
 54,000  | 
Project B:
| 
 t  | 
 0  | 
 1  | 
 2  | 
 3  | 
 4  | 
 5  | 
 6  | 
 7  | 
 8  | 
 9  | 
 10  | 
| 
 CF  | 
 95,000  | 
 112,000  | 
 155,000  | 
 -125,000  | 
 119,000  | 
 -153,000  | 
 255,000  | 
 -113,000  | 
 139,000  | 
 39,000  | 
The cost of capital (discount rate) for both projects is 7.89% /year. Based on the given information, please calculate the present value of the cash flow for both projects. Which project has a higher present value? Please show all the calculations