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You are a financial analyst that's been employed by Diacono Industries to assist them in assessing which of the following two mutually exclusive projects they
You are a financial analyst that's been employed by Diacono Industries to assist them in assessing which of the following two mutually exclusive projects they should undertake; Project A or Project B. They tell you that the required return from each of the projects is 12% p.a. and supply you with the information in the table below that they have assured you that you can rely upon. The company is concerned that there may be a conflict in the rankings provided by the NPV and IRR techniques. 11. Calculate the incremental NPV of the projects and make an investment recommendation to Diacono Industries on the basis of those calculations. [show all workings]
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