The cash flows for four projects are shown below, along with the cost of capital for these projects. If these projects are mutually exclusive, which one should be taken?
A) Year: 0 1 2 3 4 5 Cash flow: -$5000 $2000 $2000 $2000 $2000 $2000
Cost of Capital: 6.0%
B) Year: 0 1 2 3 4 5 Cash flow: -$6000 $2500 $2500 $2500 $2500 2,500
Cost of Capital: 7.5%
C) Year: 0 1 2 3 4 5 Cash flow: -$7000 $3000 $3000 $3000 $3000 $3000
Cost of Capital: 7.5%
D) Year: 0 1 2 3 4 5 Cash flow: -$8000 $3200 $3200 $3200 $3200 $3200
Cost of Capital: 9.2%
Correct Answer:
Verified
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