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Question 4 (15 points) Consider the following information for project A and B. Assume the cost of capital is 15%. Year A B A
Question 4 (15 points) Consider the following information for project A and B. Assume the cost of capital is 15%. Year A B A 0 -50,000 -80,000 1 15.625 0 2 15,625 0 3 15,625 0 4 15,625 0 5 15,625 140,000 a. Calculate for each project the payback period, NPV and the IRR. b. Would you accept the projects? Assume the projects are independent and the upper bound is 4 years.
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