Question
. Cash Flows (dollars) Project C 0 C 1 C 2 A -15,000 10,500 10,500 B -25,000 16,500 16,500 Given the above information, calculate NPV
. Cash Flows (dollars)
Project C0 C1 C2
A -15,000 10,500 10,500
B -25,000 16,500 16,500
Given the above information, calculate NPV and IRR for project A and project B if the discount rate is 10%, and then determine which project is more desirable. Select the multiple choice answer that corresponds with your answers.
A. NPV is +3,723.14 for A and +3,636.36 for B, IRR is 25.69 for A and 20.69 for B, Project A is more desirable.
B. NPV is -3,223.14 for A and -3,636.36 for B, IRR is -25.69 for A and -20.69 for B, Project B is more desirable.
C. NPV is +3,223.14 for A and +3,636.36 for B, IRR is 25.69 for A and 20.69 for B, Project B is more desirable.
D. NPV is +3,636.36 for A and +3,723.14 for B, IRR is 25.69 for A and 20.69 for B, Project B is more desirable.
E. None of the above
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ISE Financial Markets And Institutions
Authors: Anthony Saunders, Marcia Cornett, Otgo Erhemjamts
8th International Edition
1265561435, 9781265561437
