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Q3. Mobile company hired a consultant to propose a way to increase company revenues. The consultant has evaluated two mutually exclusive project with the following
Q3. Mobile company hired a consultant to propose a way to increase company revenues. The consultant has evaluated two mutually exclusive project with the following information provided for each project. Project X Project Y Capital investment Annual cash flow Estimated useful life 1,105,000 180,000 10 years 625,000 105,000 10 years Mobile uses discount rate of 9% to evaluate both project Instructions: a. Calculate NPV of both projects b. Calculate profitably index for each project C. Which project should be accepted
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