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Thomas Company is considering two mutually exclusive projects. The firm, which has a cost of capital of 13%, has estimated its cash flows as shown
Thomas Company is considering two mutually exclusive projects. The firm, which has a cost of capital of 13%, has estimated its cash flows as shown in the following table:
A.) The NPV OF project A is ____. Is it acceptable?
B.) The NPV OF project B is ____. Is it acceptable?
C.) The IRR of project A is ___%. Is it acceptable?
D.) The IRR of project B is ___%. Is it acceptable?
Project A | Project B | |
Initial investment | $140,000 | $100,000 |
Year | Cash inflows | |
1 | $25,000 | $50,000 |
2 | $35,000 | $35,000 |
3 | $50,000 | $30,000 |
4 | $50,000 | $20,000 |
5 | $60,000 | $10,000 |
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