Answer 4-10only

The NPV method is based on the assumption that projects cash flows are reinvested at the projects risk-adjusted cost of capital. The IRR method is based on the assumption that projects cash flows are reinvested at the projects risk-adjusted cost of capital. If a projects NPV exceeds its IRR, then the project should be accepted. Assume both projects have a WACC of 14% Calculate the NPV for both projects. If the projects were mutually exclusive, which would you choose to take? Calculate the NPV for both projects. If the projects were independent, which would you choose to take? Calculate the IRR for both projects. If the projects were mutually exclusive, which would you choose to take? Calculate the IRR for both projects. If the projects were independent, which would you choose to take? Assume the WACC was 7%, would you change your answer to question 6 or 7? The NPV gives a direct measure of the _____ of the project to the shareholders. The IRR is expressed as a _____ of return