10a and 10b

Problem 10: Comparing Investment Criteria. Consider the following two mutually exclusive design projects using a required return of 18%: Year Cash flow (A) Cash flow (B) 0 -22,000 -2,200 1 500 1,100 2 4,000 9001 3 10,000 1,100 4 42,000 4,000 10a. The NPV for Project A is $ 10a. Points: 1.5 10b. The NPV for Project B is $ 10b. Points: 1.5 10c. The IRR for Project A is %. 10c. Points: 1.5 10d. The IRR for Project B is % 10d. Points: 1.5 10e. The PI for Project A is 10e. Points: 1.5 10f. The PI for Project B is 10f. Points: 1.5 10g. To maximize shareholder's wealth, I would chose project 10g. Points: 1