Teal Inc. now has the following two projects available:

Project	Initial CF	After-tax CF1	After-Tax CF2	After-tax CF3
1	-11,864.01	5,250	6,125	6,500
2	-3,336.42	3,750	3,150

Assume that R_F = 5.0 percent, risk premium = 10.5 percent, and beta = 1.1. Use the EANPV approach to determine which project Teal Inc. should choose if they are mutually exclusive. (Round cost of capital and final answers to 2 decimal places, e.g.17.35% or 2,513.25.)

 

PMT₁ = ?

PMT₂ = ?

 

Answer rating: 100% (QA)

Using the Expected NPV Approach we will first calculate the expected cash flows for each period and then discount them back to present value using the ... View the full answer