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Hi to everyone.
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So, here in project a and here is project b.
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So, first we write initial investment cash flow discount rate.
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So, initial investment of dollar 100000 and the cash cash flow year 1 to 4, 1 to 4 year.
00:36
So, it is dollar 30000, 40000, dollar 50000, dollar 60000 and discount rate is 10 percent.
00:52
Now, for property b it is dollar 120000 and discount rate is 10 percent and now the cash flow for year 1 to 4 is dollar 35000, dollar 45000, dollar 55000 and dollar 65000.
01:14
So, calculate now we will calculate npv for project a.
01:23
So, npv for project a is dollar 30000, 30000 plus dollar 40000 plus dollar 50000 plus dollar 60000 minus dollar 100000.
01:48
So, it is total dollar 42662 and in the same way npv for b is dollar 33157.
02:01
So, second step to analyze the npv result.
02:06
Npv in in both npv is positive...