Question
The following are the cash flows for two projects being considered by a firm. Both projects require an initial investment of $22,000. Year Project G
The following are the cash flows for two projects being considered by a firm. Both projects require an initial investment of $22,000.
Year | Project G | Project H |
1 | $5,000 | $6,000 |
2 | $6,000 | $7,000 |
3 | $7,000 | $8,000 |
4 | $8,000 | $9,000 |
Requirements:
- Calculate the NPV for each project using a discount rate of 7%.
- Determine the payback period for each project.
- Calculate the IRR for each project.
- Which project should be accepted based on IRR?
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Calculus
Authors: Ron Larson, Bruce H. Edwards
10th Edition
1285057090, 978-1285057095
