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

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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

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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

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	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