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2) The company has two investment projects, which have the following characteristics given below: End of Year Project A Project B 0 -$1

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2) The company has two investment projects, which have the following characteristics given below:

End of Year	Project A	Project B
0	-$1.600	-$1.600
1	$1.000	$400
2	$750	$600
3	$400	$1.150

 

Note: Please show how you compute each of the items.

a) Compute the Fisher’s rate between the Project A and Project B.

b) Which project is the best for the firm if the discount rate %22?

c) If the firm value $9.800 before Project A, how much will it be after the Project?

(Assumption: discount rate for Project A is 7%)