Question
Year Project A Project B 0 -$20,000 -$25,000 1 $7,000 $8,000 2 $8,000 $9,000 3 $9,000 $10,000 4 $10,000 $11,000 5 $11,000 $12,000 (a) Calculate
Year | Project A | Project B |
0 | -$20,000 | -$25,000 |
1 | $7,000 | $8,000 |
2 | $8,000 | $9,000 |
3 | $9,000 | $10,000 |
4 | $10,000 | $11,000 |
5 | $11,000 | $12,000 |
(a) Calculate the payback period for each project. (b) Determine the NPV using a discount rate of 10%. (c) Calculate the IRR for both projects. (d) State your decision if they are mutually exclusive. (e) What is the decision if the projects are independent?
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Cornerstones Of Managerial Accounting
Authors: Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
4th Edition
978-0538473460, 0538473460
