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Q2 (B). Consider the following cash flows associated with two mutually exclusive projects, Year Project A Project B 0 -300 -405 1 -387 134 2
Q2 (B). Consider the following cash flows associated with two mutually exclusive projects, Year Project A Project B 0 -300 -405 1 -387 134 2 -193 134 3 -100 134 4 600 134 5 600 134 6 850 134 7 -180 134 Negative amounts represent cash outflows and positive amounts represent inflows. The company need to decide which project to choose. Based on the NPV, IRR, MIRR and Pl index which project is to be selected or both projects can be selected? Given the cost of capital 10%, what is the cross over rate and its significance
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