Question
5) Assume two mutually exclusive investments have the following cash flows: Project Year 0 Year 1 Year 2 Year 3 Project A -$200 $100 $100
5) Assume two mutually exclusive investments have the following cash flows:
| Project | Year 0 | Year 1 | Year 2 | Year 3 |
| Project A | -$200 | $100 | $100 | $100 |
| Project B | -$300 | $150 | $125 | $150 |
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Complete the following table assuming that the cost of capital is 10%: SHOW ALL WORK!
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Project A |
Project B | Under this Investment Criteria which project would you choose? (Enter A or B) |
| NPV |
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| IRR |
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| Payback |
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| MIRR |
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| Profitability Index |
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Based on your answers in the table above, which project would you finally choose and why?
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International Finance Theory And Policy
Authors: Paul R. Krugman, Maurice Obstfeld, Marc J Melitz,
11th Edition
013451954X, 9780134519548
