You are considering two independent projects, project A and project B. The initial cash outlay associated with project A is $40,000, and the initial cash outlay associated with project B is $60,000. The required rate of return on both projects is 10 percent. The expected annual free cash inflows from each project are in the popup window: Calculate the NPV, PI, and IRR for each project and indicate if the project should be accepted.

PROJECT A PROJECT B

Initial Outlay -40,000 -60,000

Inflow year 1 17,000 18,000

Inflow year 2 17,000 18,000

Inflow year 3 17,000 18,000

Inflow year 4 17,000 18,000

Inflow year 5 17,000 18,000

Inflow year 6 17,000 18,000

What is the NPV of project A?

What is the NPV of project B?

What is the PI of project A?

What is the PI of project B?

What is the IRR of project A?

What is the IRR of project B?