Integrative Case 8

Your company is evaluating two new investments, Project E and Project F, with the following expected cash flows.

Expected Cash Flows:

Year	Project E	Project F
0	($450)	($550)
1	$90	$110
2	$110	$140
3	$130	$170
4	$160	$200

Requirements:

1. Determine the Payback Period for both projects.
2. Calculate the Discounted Payback Period using a 10% discount rate.
3. Compute the Net Present Value (NPV) for each project using a 10% discount rate.
4. Find the Internal Rate of Return (IRR) for both projects.
5. Recommend which project should be undertaken based on NPV and IRR.