The Bothnia Company is evaluating two projects with an expected life of three years and an investment outlay of £1 million. The estimated net cash inflows for each project are as follows:
|
Project A |
Project B |
|
|
(£) |
(£) |
|
|
Year 1 |
300000 |
600000 |
|
Year 2 |
1000000 |
600000 |
|
Year 3 |
400000 |
600000 |
The opportunity cost of capital for both projects is 10%. You are required to calculate the net present value for each project.