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PQR Inc. is reviewing two mutually exclusive projects. The cost of capital is 11% and the tax rate is 28%. Project X: Initial Investment: $3,500,000
PQR Inc. is reviewing two mutually exclusive projects. The cost of capital is 11% and the tax rate is 28%.
Project X:
- Initial Investment: $3,500,000
- Life: 4 years
- Annual Pre-tax Cash Flow: $1,200,000
- Depreciation: Straight-line
Project Y:
- Initial Investment: $6,000,000
- Life: 5 years
- Annual Pre-tax Cash Flow: $1,800,000
- Depreciation: Straight-line
Calculate:
- Discounted payback period.
- Net Present Value (NPV).
- Internal Rate of Return (IRR).
- Modified Internal Rate of Return (MIRR).
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