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Initial Year Year 1 Year 2 Year 3 Year 4 Investment A (400,000.00) 126,000.00 126,000.00 126,000.00 126,000.00 Investment B (160,000.00) 52,800.00 52,800.00 52,800.00 52,800.00 Required
Initial Year | Year 1 | Year 2 | Year 3 | Year 4 | |
Investment A | (400,000.00) | 126,000.00 | 126,000.00 | 126,000.00 | 126,000.00 |
Investment B | (160,000.00) | 52,800.00 | 52,800.00 | 52,800.00 | 52,800.00 |
Required Return | 8% | ||||
Investment A | |||||
NPV | $17,327.98 | ||||
IRR | 10% | ||||
Investment B | |||||
NPV | $14,880.30 | ||||
IRR | 12% | ||||
- Analyze the results of the net present value calculations and the significance of these results, supported with examples.
- Determine which project should be adopted based on the net present value approach and provide rationale for your decision.
- Analyze the results of the internal rate of return calculation and the significance of these results, supported with examples.
- Determine which project should be adopted based on the internal rate of return approach and provide rationale for your decision.
- Determine the preferred method in the given circumstances and provide reasoning and details to support the method selected.
- Synthesize results of analyses and computations to determine the best investment opportunity to recommend to the president of Donovan Enterprises.
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