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Hello, I need the full workings for the entire question below. Thank you!(a) Two alternative projects have the following data Investment Annual cashflow Salvage Value Useful life Alpha -$10,500 $2,6

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Answer #1
Alpha
Year 0 Year 1 Year 2 Year 3
Investment -10500
CF 2600 2600 2600
salvage 3300
TCF 2600 2600 5900
discount factor, 1/(1+.12) 0.892857 0.797194 0.71178
-10500 2321.429 2072.704 4199.503
NPV= -1906.36
Beta
Year 0 Year 1 Year 2
Investment -12200
CF 7500 7500
salvage 4000
TCF 7500 11500
discount factor, 1/(1+.12) 0.892857 0.797194
-10500 6696.429 9167.73
NPV= 5364.158

we should choose project beta

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