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show calculation using a normal calculator not finacial and expalin Two projects being considered are mutually exclusive and have the following cash flows: Year 2

show calculation using a normal calculator not finacial and expalin

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Two projects being considered are mutually exclusive and have the following cash flows: Year 2 3 4 5 Project A -$50,000 15,625 15,625 15,625 15,625 15,625 Project B -S50,ooo 99,500 f the required rate of return on these projects is 10 percent, which would be chosen and why? a. b. c. d. e. Project B because of higher NPV. Project B because of higher IRR. Project A because of higher NPV. Project A because of higher IRR. Neither, because both have IRRs less than the cost of capital.

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