Question
BOAML Corp is trying to decide between two mutually exclusive projects. The cash flows for Project I and Project II are listed below: Year Project
BOAML Corp is trying to decide between two mutually exclusive projects. The cash flows for Project I and Project II are listed below: Year Project I Project II 0 -$40,000 -$15,000 1 $21,000 $8,500 2 $21,000 $7,500 3 $19,000 $6,500 If the required rate of return is 10% and any reinvestment of cash flows would also be at this rate, calculate the following for each project: Project I Project II Payback Discounted Payback Net Present Value (NPV) Internal Rate of Return (IRR) Profitability Index (PI) MIRR (assuming reinvestment rate of 5%) Which project would YOU choose?
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