You have the option of choosing between two projects that differ in their costs and revenues.The interest rate is 10%.Project A
June 7th, 2024
You have the option of choosing between two projects that differ in their costs and revenues.The interest rate is 10%.Project A: immediate cost of $100,000. This project would bring in $12,000 per year forever,starting at the end of the first year.Project B: immediate cost of $60,000. This project would bring in $10,000 per year forever,starting at the end of the first year.a) Calculate the net present value of project A.b) Calculate the net present value of project B.c) Which project should you invest is?d) At what interest rate would you be indifferent between projects A and B?