Question
You are evaluating two projects with the following cash flows: Year Project M Project N 0 -$1,000,000 -$1,500,000 1 $300,000 $400,000 2 $400,000 $500,000 3
You are evaluating two projects with the following cash flows:
Year | Project M | Project N |
0 | -$1,000,000 | -$1,500,000 |
1 | $300,000 | $400,000 |
2 | $400,000 | $500,000 |
3 | $500,000 | $600,000 |
4 | $600,000 | $700,000 |
- Calculate the NPV for each project at a discount rate of 11%.
- Determine the payback period for each project.
- Identify the IRR for each project.
- Which project should be selected based on NPV?
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Corporate Finance
Authors: David Hillier, Stephen A. Ross, Randolph W. Westerfield, Bradford D. Jordan, Jeffrey F. Jaffe
3rd Edition
0077173635, 9780077173630
