Canfly Airlines is considering two mutually exclusive projects, Project A and Project B. The projects have the following cash flows (in millions of dollars):
Year | Project A Cash Flow | Project B Cash Flow |
0 | -$4.0 | -$4.5 |
1 | 2.0 | 1.7 |
2 | 3.0 | 3.2 |
3 | 5.0 | ? |
The crossover rate of the two projects’ NPV profiles is 9 percent. What is the cash flow for Project B at t = 3?
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Canfly Airlines is considering two mutually exclusive projects, Project A and Project B. The projects have the following cash flows (in millions of dollars):
Canfly Airlines is considering two mutually exclusive projects, Project A and Project B. The projects have the following cash flows (in millions of dollars): Year Project A Cash Flow Project B Cash Flow 0 -$4.0 -$4.5 1 2.0 1.7 2 3.0 3.2 3 5.0 ? The crossover rate of the two projects’ NPV profiles is 9 percent. What is the cash flow for Project B at t = 3? (Ans: 5.79 million)
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