Apple Inc., is considering two chip making factories in Taiwan for a short period until it build a new one in the US. The financial analysts have estimated the following future cash flows for these two factories. These two factories have similar risks and thus therefore the company uses 10% as the required rate of return on them. All numbers are in millions of $.

Year	Factory 1	Factory 2
0	-$1,200	-$1,000
1	450	350
2	600	580
3	700	600

What are the NPVs of factory 1 and factory 2, respectively?

Refer to your finding above. Are these factories acceptable? Why? Which factory should be selected if they are independent and which one if they are mutually exclusive.

What are the Internal rate of return of factory 1 and factory 2, respectively?

		14% and 20%.
		19.84% and 22.43%
		18.5% and 21.22%
		13% and 18%

Refer to your finding above. Based on IRR, are these factories acceptable? why? Which factory should be selected based on IRR if they are independent and which one if they are mutually exclusive.