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Discuss the net present value of the first project compared

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Exercise

Understanding NPV

Wilson, Inc., has a project with an expected cash inflow of $1 million at the end of Year 5. Wilson has a second project with an expected cash inflow of $200,000, to be received at the end of each year for the next five years.

Required:

If both projects have the same total expected cash outflows, what can be said of the net present value of the first project compared with that of the second project?

SelectNPV would be lessNPV would be greaterNPV would be the same

Reference no: EM131771462

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