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Blossom Corp. management is evaluating two independent projects. The costs and expected cash flows are given in the following table. The cost of capital
Blossom Corp. management is evaluating two independent projects. The costs and expected cash flows are given in the following table. The cost of capital is 13.32 percent. Year 0 A B - $326,104 -$401,650 1 129,300 168,190 2 129,300 142,830 3 129,300 149,500 4 129,300 118,800 5 129,300 119,800 a. Calculate the projects' NPV. (Enter negative amounts using negative sign e.g. -45.25. Do not round discount factors. Round other intermediate calculations and final answer to O decimal places, e.g. 1,525.) The NPV of project A is $ and project B is $ b. Calculate the projects' IRR. (Round answer to 2 decimal places, e.g. 15.25%.) The IRR of Project A is % and Project B is c. Which project should be chosen based on NPV? Based on IRR? Is there a conflict? Blossom should choose There is between the NPV and IRR decisions. d. If you are the decision maker for the firm, which project or projects will be accepted? will be accepted. %.
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