Question
SunHealth Inc is evaluating two capital investments, each of which requires an up-front (year 0) expenditure of $800,000. The discount rate for both projects is
SunHealth Inc is evaluating two capital investments, each of which requires an up-front (year 0) expenditure of $800,000. The discount rate for both projects is 5.2%. The projects are expected to produce the following net cash inflows: Year Project A Project B 1 $250,000 $125,000 2 $275,000 $125,000 3 $160,000 $160,000 4 $125,000 $275,000 5 $125,000 $250,000
1) What is the IRR for project A? (Round to nearest hundredth) 2) What is the NPV for project B? 3) Which project(s) are financially feasible? a-Project A b-Project B c-Project A & B d-Neither Project A or B
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