Question
ABC company is evaluating the following projects : Time Project A Project B 0 $-25,000 $-25,000 1 10,000 15,000 2 5,000 10,000 3 20,000 10,000
ABC company is evaluating the following projects :
| Time | Project A | Project B |
| 0 | $-25,000 | $-25,000 |
| 1 | 10,000 | 15,000 |
| 2 | 5,000 | 10,000 |
| 3 | 20,000 | 10,000 |
Use the NPV and the IRR method to evaluate the projects, given that the required rate of return for the company is 17%.
Which project should be accepted if they were:
a) Mutually exclusiveb) Independent
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Fundamentals of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
Concise 6th Edition
324664559, 978-0324664553
