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You are considering an investment in two projects, A and B. Both projects will cost $100,000, and the projected cash flows are as follows Year
You are considering an investment in two projects, A and B. Both projects will cost $100,000, and the projected cash flows are as follows
| Year 1 | Project A | Project B |
| 1 | 6,250 | 45,000 |
| 2 | 18,750 | 33,750 |
| 3 | 35,000 | 25,000 |
| 4 | 43,750 | 18,750 |
| 5 | 50,000 | 12,500 |
A. Assuming that the WACC is 8%, calculate the payback period, discounted payback period, NPV, PI, IRR and MIRR. If the projects are muttually exclusive, which project should be selected? B. Create an NPV profile chart for projects A and B. What is the exact crossover rate for these two projects?
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