1- Following are the estimated after-tax cash flows for two mutually exclusive projects:

Following are the estimated after-tax cash flows for two mutually exclusive projects:

year Machine D Machine Q

0 $(32,500) $(29,800)

1 20,500 4,000

2 10,000 9,000

3 6,500 16,000

4 7,800 19,500

The company's rate of return is 16 percent. What is the internal rate of return (IRR) of the projects the company shoul purchase?

2- Compute the (a) NPV, (b) IRR, (c) MIRR, and (d) discounted payback for the following independent capital budgeting projects. (r=9%)

year Project T Project U

0 $(8,000) $(10,000)

1 2,000 9,000

2 1,000 5,000

3 7,000 (3,100)

Which project(s) should the company purchase? why?