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(Size-disparity problem) The D. Dorner Farms Corporation is considering purchasing one of two fertilizer-herbicides for the upcoming year. The more expensive of the two is
(Size-disparity problem) The D. Dorner Farms Corporation is considering purchasing one of two fertilizer-herbicides for the upcoming year. The more expensive of the two is better and will produce a higher yield. Assume these projects are mutually exclusive and that the required rate of return is 9 percent. Given the following free cash flows: a. Calculate the NPV of each project. b. Calculate the Pl of each project. c. Calculate the IRR of each project. d. If there is no capital-rationing constraint, which project should be selected? If there is a capital-rationing constraint, how should the decision be made? a. What is the NPV of project A? $ 125.69 (Round to the nearest cent.) Data Table What is the NPV of project B? $ 339.45 (Round to the nearest cent.) (Click on the following icon in order to copy its contents into a spreadsheet.) b. What is the PI of project A? PROJECT A - $700 900 Initial outlay Inflow year 1 PROJECT B - $7,000 8,000 (Round to three decimal places.) Print Done
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