Calculate the net present value of each of the three hypothetical projects described below. Assume the interest rate is 5% Project A: You receive an immediate payoff of $1,000 Project B: You pay $100 today in order to receive $1,200 a year from now Project C: You receive $1,200 today but must pay $200 one year from noW Which of the three projects would you choose to undertake based on your net present value calculations? Explain. a.

Calculate the net present value of each of the three hypothetical projects described below. Assume the interest rate is 5% Project A: You receive an immediate payoff of $1,000 Project B: You pay $100 today in order to receive $1,200 a year from now Project C: You receive $1,200 today but must pay $200 one year from noW Which of the three projects would you choose to undertake based on your net present value calculations? Explain. a.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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