Comparing Present Value (PV) and Future Value (FV) of Projects A and B
Project A: PV=6000/(1+8%)+4000/(1+8%)^2+2000/(1+8%)^3=10572.58 FV=6000*(1+8%)^2+4000*(1+8%)+2000=13318.4 Project B: PV=2000/(1+8%)+4000/(1+8%)^2+6000/(1+8%)^3=10044.20 FV=2000*(1+8%)^2+4000*(1+8%)+6000=12652.8 From the calculations, it can be seen that both the present value and future value of Project A are greater than those of Project B.
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