Question
You need to complete this problem in a spreadsheet and show all your work. Create an excel file that shows your calculations. Clearly indicate your
You need to complete this problem in a spreadsheet and show all your work. Create an excel file that shows your calculations. Clearly indicate your final answer(s).
There are two mutually exclusive projects, Project A and Project B. Project A is a 7-year project and Project B is a 5-year project. The appropriate discount rate for both projects is 10%. The cash flows for the projects are listed below:
Year | Project A | Project B |
0 | -70,000 | -85,000 |
1 | 14,000 | 15,000 |
2 | 21,000 | 29,000 |
3 | 25,000 | 44,000 |
4 | 35,000 | 50,000 |
5 | 33,000 | 45,000 |
6 | 30,000 | N/A |
7 | 24,000 | N/A |
a) What is the IRR for each project? 2pts
b) What is the NPV for each project? 3pts
c) What is the Equivalent Annual Annuity for each project? 3pts
d) Which project would you pick - explain your reasoning? 2pts
I need this in an excel file that I can download and save OR provide the formuas so I can put them in excel.
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