I am considering adding a new service package to my business. This service package is expected to generate sales for four years after which time the required equipment will be obsolete. The company's required return rate is 14.8%. What is the project's net present value?

(The initial investment is $62,000 and the cash flows are as follows:

CF 1 $16,500

CF 2 $23,800

CF 3 $27,100

CF 4 $23,300)

Or should I go with this investment

 

I'm considering a project with a start up cost of $81,900. I require a rate of return of 13%. Based on the IRR of the following cash flows, should I accept the project? Why or why not?

 

Yr 1 $21,100

Yr 2 $24,200

Yr 3 $30,000

Yr 4 $25,600

Yr 5 $19,000