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Project S has a cost of $10,000 and is expected to produce benefits (cash flows) of $4,000 per year for 5 years. Project L costs
Project S has a cost of $10,000 and is expected to produce benefits (cash flows) of $4,000 per year for 5 years. Project L costs $21,000 and is expected to produce cash flows of $8,000 per year for 5 years. Calculate the two projects NPVs, IRRs, MIRRs, PIs, and Pay Back Period assuming a cost of capital of 12%. Which project would be selected, assuming they are mutually exclusive, using each ranking method? Which should actually be selected?
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