MNO Inc. Financial Decision-Making

• MNO Inc. is considering two projects with the following details:
• Year 0: Project M: -100,000, Project N: -100,000
• Year 1: Project M: 40,000, Project N: 30,000
• Year 2: Project M: 30,000, Project N: 40,000
• Year 3: Project M: 20,000, Project N: 50,000
• Year 4: Project M: 10,000, Project N: 60,000
• Cost of capital: 8%
• Requirements:
  1. Calculate the NPV for both projects.
  2. Calculate the IRR for both projects.
  3. Determine the profitability index for each project.
  4. Assess which project should be selected considering NPV, IRR, and profitability index.