A company is considering the two projects, Project A and Project B. Project. A has an initial investment of $50,000 and is expected to generate a net cash inflow of $8,000 per year for 12 years. Project B has an initial investment of $70,000 and is expected to generate a net cash inflow of $15,000 per year for 4 years. The company’s cost of capital is 8%. Which project should the company choose based on NPV? A) Project A B) Project B C) Both projects are equally viable. D) Neither project is viable
They have given the answer as D. But I got the answer as A. Can you explain this question?