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Question 2 (25 points): Given cash flows of projects A and B with unequal life below, which project is a better investment on the basis
Question 2 (25 points): Given cash flows of projects A and B with unequal life below, which project is a better investment on the basis of NPV and IRR analysis assuming a minimum rate of return of 20%? It is recommended that one apply incremental analysis techniques. Project A: C=-79,000 I=30,000 I=25,000 1=40,000 I=25000 I=30,000 L=$69,000 Year 0 1 2 3 4 5 Project B: C=-204,000 I=90,000 I=80,000 I=90,000 I=95,000 4 L=$29,000 Year 0 1 2 3 C: Cost, I: Income, L: Salvage Value
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