Consider the following opportunities: Opportunity 1 requires a $4,750 cash payment now but will result in $18,800 cash received in Year 5. Opportunity 2 requires no cash outlay and results in $5,500 cash received in years 3 and 5. Use a 6 percent discount rate and determine which opportunity results in a greater NPV. Use a 10 percent discount rate and determine which opportunity results in a greater NPV. a) NPV of Opportunity 1 at 6%: $X; NPV of Opportunity 2 at 6%: $Y; NPV of Opportunity 1 at 10%: $Z; NPV of Opportunity 2 at 10%: $W b) NPV of Opportunity 1 at 6%: $Y; NPV of Opportunity 2 at 6%: $X; NPV of Opportunity 1 at 10%: $W; NPV of Opportunity 2 at 10%: $Z c) NPV of Opportunity 1 at 6%: $X; NPV of Opportunity 2 at 6%: $Y; NPV of Opportunity 1 at 10%: $W; NPV of Opportunity 2 at 10%: $Z d) NPV of Opportunity 1 at 6%: $Y; NPV of Opportunity 2 at 6%: $X; NPV of Opportunity 1 at 10%: $Z; NPV of Opportunity 2 at 10%: $W
