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Homework answers / question archive / HPC is considering two unequal-lived, mutually exclusive capital budgeting projects
HPC is considering two unequal-lived, mutually exclusive capital budgeting projects. The cash flows for each project are shown below. Calculate the NPV and the annualized net present value (ANPV) for each project, using the firm's 11% WACC. Which project would you recommend, and why?
Year
Project A
Project B
0
$(54,000)
$(78,000)
1
$16,000
$36,000
2
$25,000
$32,000
3
$35,000
$28,000
4
$38,000
$24,000
5
$20,000
6
$16,000
7
$14,000
8
$12,000
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