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Consider two mutually exclusive projects, Project V and Project W. Both require an initial investment of $24,000. Year Project V Project W 1 $10,000 $9,000
Consider two mutually exclusive projects, Project V and Project W. Both require an initial investment of $24,000.
Year | Project V | Project W |
1 | $10,000 | $9,000 |
2 | $8,000 | $7,000 |
3 | $6,000 | $5,000 |
Requirements:
- Calculate the NPV for each project using a discount rate of 15%.
- Determine the payback period for each project.
- Calculate the IRR for each project.
- Which project should be accepted based on NPV?
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Business Mathematics In Canada
Authors: Ernest Jerome
7th edition
978-0071091411, 71091416, 978-0070009899
