Practice questions:
Farmer George Tractors Ltd has £500,000 to invest. The net cash flows of two possible projects are as follows:
|
Year
|
Project 1
|
Project 2
|
| |
£ |
£ |
|
1
|
80,000
|
90,000
|
|
2
|
100,000
|
110,000
|
|
3
|
180,000
|
190,000
|
|
4
|
140,000
|
110,000
|
|
5
|
100,000
|
80,000
|
Which project should the management choose, and why?