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NPV and IRR analysis of projects Thomas Company is considering two mutually exclusive projects. The firm, which has a cost of capital of 12%, has
NPV and IRR analysis of projects Thomas Company is considering two mutually exclusive projects. The firm, which has a cost of capital of 12%, has estimated its cash flows as shown in the following table: a. The NPV of project A is $(Round to the nearest cent.) According to the NPV method, is project A acceptable? (Select the best answer below.) O Yes The NPV of project B is $. (Round to the nearest cent.) Is project B acceptable on the basis of NPV? (Select the best answer below.) 0 Yes - Data table b. The IRR of project Ais%. (Round to two decimal places.) Is project A acceptable on the basis of IRR? (Select the best answer below.) (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Yes Project A $130,000 Project B $85.000 O No Initial Investment (CF) Year (0) The IRR of project Bis%. (Round to two decimal places.) Is project B acceptable on the basis of IRR? (Select the best answer below.) 1 2 3 4 5 Cash inflows (CF) $25,000 $40,000 $35,000 $35,000 $45,000 $30,000 $50,000 $10,000 $55,000 $5,000 Yes
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