Calculate the project cash flow generated for Project A and Project B

Calculate the project cash flow generated for Project A and Project B using the NPV method.

• Which project would you select, and why?
• Which project would you select under the payback method? The discount rate is 10% for both projects.
• Use Microsoft^® Excel^® to prepare your answer.
• Note that a similar problem is in the textbook in Section 5.1.

Sample Template for Project A and Project B:

Using the Payback Method, IRR, and NVP

Initial investment Year 1 Year 2 Year 3

Project A (10,000) 5,000 5,000 5,000

Project B (55,000) 20,000 20,000 20,000

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