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Your boss hands you the following information for a pair of mutually exclusive projects and asks for your recommendation. What should you do? Cash Flow
Your boss hands you the following information for a pair of mutually exclusive projects and asks for your recommendation. What should you do?
Cash Flow | ||||||
Project | Cost of Capital | IRR | Year 0 | Year 1 | Year 2 | Year 3 |
A | 13% | 30% | -10,000 | 8000 | 5000 | 2000 |
B | 13% | 26% | -10,000 | 2800 | 6000 | 8000 |
The NPV of project A is $___ and the NPV of project B is $___. Using the NPV rule, project ___ should be selected.
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