Question
P1024 All techniques: Decision among mutually exclusive investments Pound Industries is attempting to select the best of three mutually exclusive projects. The initial investment and
P1024 All techniques: Decision among mutually exclusive investments Pound Industries is attempting to select the best of three mutually exclusive projects. The initial investment and after-tax cash inflows associated with these projects are shown in the following table. PLEASE HELP; I DO NOT HAVE A FINANCIAL CALCULATOR AND I CANNOT USE EXCEL SPREADSHEETS; I HAVE A TI84 PLUS, PLEASE BREAK DOWN ON HOW TO GET THE IRR .... I REALLY DON'T UNDERSTAND. THANKS!
| Cash flows | Project A | Project B | Project C |
| Initial investment (CF0) | $60,000 | $100,000 | $110,000 |
| Cash inflows (CFt), t = 1 to 5 | 20,000 | 31,500 | 32,500 |
- Calculate the net present value (NPV) of each project, assuming that the firm has a cost of capital equal to 13%.
- Calculate the internal rate of return (IRR) for each project.
- Summarize the preferences dictated by each measure and indicate which project you would recommend. Explain why.
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Value Investing
Authors: Mike Hartley
1st Edition
979-8864443309
