If you could only take one, you would take the
one with the higher NPV, B, because it adds $7.14 to the
value of the firm compared with -$0.03 for A.
F97Q3.1
Consider the following two projects:
| Year 0 | Year 1 | Year 2 | Year 3 | |
| A | -40 | 20 | -10 | 40 |
| B | -100 | 60 | 0 | 70 |
The opportunity cost of capital for both projects is 10%.
If you could only take one, you would take the
one with the higher NPV, B, because it adds $7.14 to the
value of the firm compared with -$0.03 for A.