Making a decision for Investment using NPV.
You currently have 200 to invest. Your discount rate is 20%. (i.e. cost of capital). You have the opportunity to invest in the following projects. In which project(s) should you invest (note: you can invest in 0, 1 or 2 projects)?
|
Years/cash flows
|
0
|
1
|
2
|
3
|
4
|
5
|
6
|
|
Project A
|
-150
|
55
|
60
|
60
|
65
|
0
|
0
|
|
Project B
|
-50
|
10
|
15
|
25
|
25
|
25
|
20
|
|
Project C
|
-200
|
100
|
90
|
50
|
50
|
10
|
0
|