(10–13)

NPV and IRR Analysis Cummings Products is considering two mutually exclusive investments whose expected net cash flows are as follows:

Chapter 10: The Basics of Capital Budgeting: Evaluating Cash Flows 415 EXPECTED NET CASH FLOWS Year Project A Project B 0 −$300 −$405 1 −387 134 2 −193 134 3 −100 134 4 600 134 5 600 134 6 850 134 7 −180 0

a. Construct NPV profiles for Projects A and B.