Problem 10-6 (similar to)

(NPV, PI, and IRR calculations) You are considering two independent projects, project A and project B. The initial cash outlay associated with project A is $60,000, and the initial cash outlay associated with project B is $80,000 . The required rate of return on both projects is 9 percent. The expected annual free cash inflows from each project are in the chart below.

Calculate the NPV, PI, and IRR for each project and indicate if the project should be accepted.

	PROJECT A	PROJECT B
Initial Outlay	-60000	-80000
Inflow year 1	18000	19000
Inflow year 2	18000	19000
Inflow year 3	18000	19000
Inflow year 4	18000	19000
Inflow year 5	18000	19000
Inflow year 6	18000	19000