Number 8:

cash inflows are as follows: (Click the icon to view the expected net cash inflows.) Read the requirements. IRR calculations to two decimal places, X.XX\%.) The NPV (net present value) of Plan Alpha is The NPV (net present value) of Plan Beta is A. The company should not pursue either plan because the NPV is positive and the IRR is greater than the company's required rate of return for both plans. B. The company should not pursue either plan because the NPV is negative and the IRR is less than the company's required rate of return for both plans. must choose only one plan, it should pursue Plan Alpha because it has the lower NPV and IRR. must choose only one plan, it should pursue Plan Beta because it has the higher NPV and IRR. Data table Requirements 1. Use Excel to compute the NPV and IRR of the two plans. Which plan, if any, should the company pursue? 2. Explain the relationship between NPV and IRR. Based on this relationship and the company's required rate of return, are your answers as expected in Requirement 1 ? Why or why not? 3. After further negotiating, the company can now invest with an initial cost of $7,600,000 for both plans. Recalculate the NPV and IRR. Which plan, if any, should the company pursue