Two projects, A and B, have the following projected cash inflows: Year Project A Project B 1
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Question:
Two projects, A and B, have the following projected cash inflows:
Year | Project A | Project B |
1 | $30,000 | $20,000 |
2 | $40,000 | $30,000 |
3 | $50,000 | $40,000 |
Both require an initial investment of $70,000.
a. Calculate the NPV for both projects if the discount rate is 12%. b. Determine the IRR for both projects. c. Calculate the profitability index for both projects. d. Evaluate the discounted payback period for each project. e. If the projects are mutually exclusive, which project should be chosen?
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