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All techniques with NPV profileMutually exclusive projects Projects A and B, of equal risk, are alternatives for expanding Rosa Company's capacity. The firm's cost of
All techniques with NPV profileMutually exclusive projects Projects A and B, of equal risk, are alternatives for expanding Rosa Company's capacity. The firm's cost of capital is 13%. The cash flows for each project are shown in the following table: a. Calculate each project's payback period. b. Calculate the net present value (NPV) for each project. c. Calculate the internal rate of return (IRR) for each project. d. Indicate which project you would recommend. a. The payback period of project Ais years. (Round to two decimal places.) x Data Table The payback period of project Bis years. (Round to two decimal places.) b. The NPV of project A is $. (Round to the nearest cent.) (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) The NPV of project B is $. (Round to the nearest cent.) c. The IRR of project Ais%. (Round to two decimal places.) Project A $100.000 Project B $60,000 The IRR of project B is %. (Round to two decimal places.) Initial investment (CF) Year (1) 1 2 d. Which project will you recommend? (Select the best answer below.) Cash inflows (CF) $20,000 $20,000 $25,000 $20,000 $30,000 $20,000 $35,000 $20,000 $40,000 $20,000 O A. Project B B. Project A 4 5 Click to select your answer(s) Print Done
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