Question
Project Gamma initial investment: $40,000. Annual cash inflows: $10,000 for 5 years. Project Delta initial investment: $35,000. Annual cash inflows: $9,000 for 6 years. (a)
- Project Gamma initial investment: $40,000.
- Annual cash inflows: $10,000 for 5 years.
- Project Delta initial investment: $35,000.
- Annual cash inflows: $9,000 for 6 years.
(a) Calculate the NPV for each project using a 7% discount rate. (b) Determine the IRR for both projects. (c) State which project to accept if they are mutually exclusive. (d) Decision if the projects are independent.
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Cornerstones Of Managerial Accounting
Authors: Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
4th Edition
978-0538473460, 0538473460
