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Analyze the following cash flows for Project X1 and Project X2: Year Project X1 Project X2 0 -$65,000 -$75,000 1 | 1 | $16,000 |
Analyze the following cash flows for Project X1 and Project X2:
Year | Project X1 | Project X2 |
0 | -$65,000 | -$75,000 |
1 |
| 1 | $16,000 | $19,000 | | 2 | $19,000 | $22,000 | | 3 | $22,000 | $25,000 | | 4 | $25,000 | $28,000 | | 5 | $28,000 | $31,000 |
a. Compute the NPV for each project with a required rate of return of 10%. b. Determine the IRR for each project. c. Calculate the traditional payback period for both projects. d. Assess the profitability index for both projects. e. If the projects are mutually exclusive, which project should be selected?
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