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Two additional mutually exclusive projects

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Caledonia is considering two additional mutually exclusive projects. The cash flows associ­ated with these projects are as follows:
========================================================
YEAR PROJECT A PROJECT B
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0 -$100,000 -$100,000
1 32,000 0
2 32,000 0
3 32,000 0
4 32,000 0
5 32,000 $200,000
=========================================================
The required rate of return on these projects is 11 percent.

b. What is each project's net present value?

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Solution Summary

The solution examines two additional mutually exclusive projects for Caledonia. Each project's net present value is examined.

$2.19