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Projects S has a cost of $10,000 and is expected to produce benefits (cash flows) of $3,000 per yr for 5 yrs. Project L costs
Projects S has a cost of $10,000 and is expected to produce benefits (cash flows) of $3,000 per yr for 5 yrs. Project L costs $25,000 and is expected to produce cash flows of $7,400 per yr for 5 yrs. Calculate the two projects NPVs, IRRs, MIRRs, and PIs 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. Show your work.
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