financial-management-task-7

Project A and Project B require an initial investment of $10,000 and are expected to generate an equal cash inflow of $20,000 over their life of four years. The net cash inflow for each year of life of both the proposals is given below:

Required:

  1. Compute the present value of cash inflows generated by both the proposals assuming a discount rate of 18%.
  2. Which of the two proposals is better if compared using the net present value method?

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