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Rocky Mountain Gear is evaluating two projects with the following cash flows: Year Project X Project Y 0 $ 317,000 $ 295,200 1 147,200 137,850
Rocky Mountain Gear is evaluating two projects with the following cash flows:
| Year | Project X | Project Y |
|---|---|---|
| 0 | $ 317,000 | $ 295,200 |
| 1 | 147,200 | 137,850 |
| 2 | 164,700 | 155,050 |
| 3 | 129,800 | 120,800 |
1. What is the NPV and IRR of each project? (use a 10% interest rate)
2. What is the best project based on that rate?
3. What interest rate will make the NPV for the projects equal?
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