Cummings products is considering two mutually exclusive investments whose expect

Question

Cummings products is considering two mutually exclusive investments whose expected net cash flows are as follows:

Year

Project A

Project B

0

-400

-650

1

-528

210

2

-219

210

3

-150

210

4

1100

210

5

820

210

6

990

210

7

-325

210

  

Year

     

Project A

     

Project B

     

0

     

-400

     

-650

     

1

     

-528

     

210

     

2

     

-219

     

210

     

3

     

-150

     

210

     

4

     

1100

     

210

     

5

     

820

     

210

     

6

     

990

     

210

     

7

     

-325

     

210

   Cummings products is considering two mutually exclusive investments whose expected net cash flows are as follows: Construct NPV profiles for projects A & B.

Explanation / Answer

for A,

No discount rate is given we cant construct NPV

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