Problem:
Consider these two projects
Project A: C0= -$36, C1= +$20, C2= +$20, C3= +$20
Project B: C0= -$50, C1= +$25, C2= +$25, C3= +$25
Q1. Which project has the higher NVP if the discount rate is 10%?
Q2. Which has the higher profitability index?
Q3. Which project is most attractive to a firm that can raise an unlimited amount of funds to pay for its investment projects? Which project is most attractive to a firm that is limited in the funds it can raise?