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Connor Corporation is considering two projects ( see below ) . For your analysis, assume these projects are mutually exclusive with a required rate of
Connor Corporation is considering two projects see below For your analysis, assume these projects
are mutually exclusive with a required rate of return of
Compute the following for each project:
NPV net present value
PI profitability index
IRR internal rate of return
Based on your analysis, answer the following questions :
Which is the best choice? Why?
Which project should be selected and why? If the projects had the same IRR amounts but
different NPV totals, then how would you know which project to select? Explain.
Financial Management
Unit VIII Assignment
What would happen if both projects had negative NPV totals? Which project would you choose?
What do negative NPVs indicate? Explain.
Should we also use the payback method to assist us in project selection? Why or why not?
Explain.
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