Tracy Technology Inc. is evaluating two projects for this year's capital budget.  The discount rate for each project is different.  Project A has a discount rate of 13.8%.  Project B has a discount rate of 14.7%.  The cash flows are shown below.  Calculate the NPV and the IRR for both projects.  Would you accept or reject each project?  Why?

 

                        0                1         2          3         4         5

Project A         30,100 10,000 12,000 12,000 10,000 10,800

Project B         90,500 28,000 29,000 27,000 26,000 26,100

Answer rating: 100% (QA)

To calculate the NPV Net Present Value and IRR Internal Rate of Return for both projects we can use ... View the full answer