Question
Crane Corp. management is evaluating two mutually exclusive projects. The cost of capital is 15 percent. Costs and cash flows for each project are given
Crane Corp. management is evaluating two mutually exclusive projects. The cost of capital is 15 percent. Costs and cash flows for each project are given in the following table.
| Year | Project 1 | Project 2 | ||
| 0 | -$1,266,858 | -$1,100,968 | ||
| 1 | 256,000 | 319,000 | ||
| 2 | 318,000 | 319,000 | ||
| 3 | 480,000 | 319,000 | ||
| 4 | 483,000 | 319,000 | ||
| 5 | 773,000 | 319,000 |
NPV of project 1 is$
NPV of project 2 is$
IRR of project 1 is %
IRR of project 2 is %
Crane Corp should accept:
Step by Step Solution
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Step: 1
To calculate the NPVs and IRRs of each project we first need to calculate the present value of cash ...
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College Algebra
Authors: Margaret L. Lial, John Hornsby, David I. Schneider, Callie Daniels
12th edition
134697022, 9780134313795 , 978-0134697024
