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Question 14.st.1: A project (A) costs £3,000 today and is expected to generate...

A project (A) costs £3,000 today and is expected to generate a cash flow of £10,000 in a
year’s time, whereas an alternative project (B) costing £4,000 today is forecast to generate
£12,000 in two years’ time. Calculate the net present value of each project, and
state which project appears to be preferable.

Use a 10% p.a. discount rate. Relevant discount factors are:

Year 1 0.909
Year 2 0.826
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