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Each of two mutually exclusive projects involves an investment of $124,000. Net cash flows for the projects are as follows: Year Project A Project B
Each of two mutually exclusive projects involves an investment of $124,000. Net cash flows for the projects are as follows:
| Year | Project A | Project B |
| 1 | 60,000 | 57,000 |
| 2 | 62,000 | 64,000 |
| 3 | 40,000 | 47,000 |
A. Calculate each project's payback period. (2 Points)
B. Compute the Net Present Value (NPV) of each project when the firm's cost of capital is 10 percent. (2 Points)
C. Internal Rate of Return (IRR) -Your choice; based on your answer to part (B). (2 Points)
D. Modified Internal Rate of Return (MIRR) Your choice; based on your answer to part (B). (2 Points)
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