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You are asked to evaluating two manually exclusive projects x and y. the cash flow for each is listed below along with the calculated npv
You are asked to evaluating two manually exclusive projects x and y. the cash flow for each is listed below along with the calculated npv and irr. the firm's cost of capital is 12%.
- Calculate the NPV of each project. Which project would you accept based on NPV criterion and why?
- What Is the IRR of each project?
- Would you accept/reject decision change for the projects X and Y if the cost of capital increased to 18%?
Year | Cash flow x | Cash flow y |
0 | -350,000 | -35,000 |
1 | 25,000 | 17,000 |
2 | 70,000 | 11,000 |
3 | 70,000 | 17,000 |
4 | 430,000 | 11,000 |
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