Question
Company AB is intending to make investment in one of the two mentioned projects (B1) and (B2) and finance department made a forecast for
Company AB is intending to make investment in one of the two mentioned projects (B1) and (B2) and finance department made a forecast for the cash flow of the two projects. Depending on the below mentioned table: Project Project B Year 0 Year 1 Year 2 Year 3 Year 4 -$25,000 18,000 13,000 3,000 1,815 Project B - $25,000 1,500 2,540 15,500 27,000 a) Evaluate these projects economically and decide the best project using the net present value method (use i = 10%). b) What is the best project using the internal rate of return approach?
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