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A company is evaluating between two mutually exclusive projects. The estimated cash flows are indicated below. Calculate the NPV and IRR for both projects. The
A company is evaluating between two mutually exclusive projects. The estimated cash flows are indicated below. Calculate the NPV and IRR for both projects. The discount rate related to Project A is 12% and the discount rate related to Project B is 16%. Assuming the company is trying to maximize NPV which project should it undertake? Assume the company is trying to maximize the IRR, which project should it undertake? Year Project A Project A 0 ($100,000) ($5,000) 1 $0 $0 2 $0 $7,500 3 $0 $0 4 $0 $0 5 $0 $0 6 $250,000 $0
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