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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 11%. 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 retur (IRR) for each project. d. Indicate which project you would recommend Data Table a. The payback period of project A is years. (Round to two decimal places.) The payback period of project B is years. (Round to two decimal places.) b. The NPV of project A is $. (Round to the nearest cent.) The NPV of project B 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.) Project A Project B Initial investment $210,000 $180,000 (CF) Year(t) Cash inflows (CF) $55.000 $55,000 $60,000 $55,000 3 $65,000 $55,000 4 $70,000 $55,000 5 $75,000 $55,000 c. The IRR of project Ais%. (Round to two decimal places.) The IRR of project Bis%. (Round to two decimal places.) d. Which project will you recommend? (Select the best answer below.) O A. Project A OB. Project B Print Done
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