Erica's Farm is faced with two mutually exclusive projects. The following is data on the two projects.
Project C K
Initial Investment $40,000 $50,000
Project Life 3 years 3 years
Annual Cash flow 15,000 25,000
Risk adjusted discount rate 10% 14%
Risk free rate of return 6% 6%
Evaluate the projects using risk-adjusted discount rates. What is the NPV for each project?© BrainMass Inc. brainmass.com March 4, 2021, 11:17 pm ad1c9bdddf
The expert evaluates Erica's farm project using risk adjusted discount rates and the net present value.