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Firm average project

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Quantitative Problem: Bellinger Industries is considering two projects for inclusion in its capital budget, and you have been asked to do the analysis. Both projects' after-tax cash flows are shown on the time line below. Depreciation, salvage values, net operating working capital requirements, and tax effects are all included in these cash flows. Both projects have 4-year lives, and they have risk characteristics similar to the firm's average project. Bellinger's WACC is 10%.

                           0         1            2            3            4

Project A       -990      610      385       230       280

Project B       -990      210      320       380       730

a. What is Project A's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations.

$________

b.  What is Project B's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations.

$________

Reference no: EM131101030

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