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In: Finance

Which project should D&A should pick? Project A: t 0 1 2 3 4 5 6...

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

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