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  3. consider projects a and b with the following cash

Consider projects A and B with the following cash flows: ...

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Finance

Consider projects A and B with the following cash flows:

C0 C1 C2 C3
A -$44 +$28 +$28 +$28
B -69 +38 +38 +38

a) What is the NPV of each project if the discount rate is 12%?

b) Which project has the higher NPV?

c) Which project has the higher profitability index?

d) Which project is most attractive to a firm that can raise an unlimited amount of funds to pay for its investment projects?

e) Which project is most attractive to a firm that is limited in the funds it can raise?

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