Question
Thomas Company is considering two mutually exclusive projects. The firm, which has a 12% cost of capital, has estimated its cash flows as shown in
Thomas Company is considering two mutually exclusive projects. The firm, which has a 12% cost of capital, has estimated its cash flows as shown in the following table.
| Year | Project A | Project B |
| 0 (Initial investment) | $130,000 | $85,000 |
| 1 | 35,000 | 40,000 |
| 2 | 35,000 | 35,000 |
| 3 | 45,000 | 30,000 |
| 4 | 50,000 | 10,000 |
| 5 | 55,000 | 5,000 |
Calculate the NPV of each project, and assess its acceptability.
Calculate the IRR for each project, and assess its acceptability
Calculate the XNPV and XIRR for each project on the basis of the following dates:
Period 0 = September 1, 2016
Period 1 = November 10, 2016
Period 2 = June 30, 2017
Period 3 = August 14, 2017
Period 4 = December 31, 2017
Period 5 = April 12, 2018
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Real Life Money An Honest Guide To Taking Control Of Your Finances
Authors: Clare Seal
1st Edition
1472272293, 978-1472272294
