An organization considers three mutually exclusive projects. For each project, estimations are available regarding the initial...

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An organization considers three mutually exclusive projects. For each project, estimations are available regarding the initial capital investment, the market value of these after 20 years, and annual cash flows. These annual cash flows consist of cash outflows for operations and maintenance, and cash inflows from selling services to users. See the table below. Capital investment Residual value Annual O&M Annual cash inflow e. Project A € 125,000 € 40,000 € 10,000 € 35,000 Project B €160,000 € 50,000 -€ 10,000 € 42,000 Project C €180,000 € 50,000 -€ 9,500 € 44,000 C. For each project, calculate the internal rate of return (IRR). d. For each project, calculate the present value of the cash inflows. Use a discount rate of 10%. For each project, calculate the present value of the cash outflows and the net present value (NPV). f. There is inconsistent ranking. Explain this in words and also using a calculation of the NPV and the IRR of the difference between projects A and B, the difference between projects B and C, and the difference between projects A and C. 1 An organization considers three mutually exclusive projects. For each project, estimations are available regarding the initial capital investment, the market value of these after 20 years, and annual cash flows. These annual cash flows consist of cash outflows for operations and maintenance, and cash inflows from selling services to users. See the table below. Capital investment Residual value Annual O&M Annual cash inflow e. Project A € 125,000 € 40,000 € 10,000 € 35,000 Project B €160,000 € 50,000 -€ 10,000 € 42,000 Project C €180,000 € 50,000 -€ 9,500 € 44,000 C. For each project, calculate the internal rate of return (IRR). d. For each project, calculate the present value of the cash inflows. Use a discount rate of 10%. For each project, calculate the present value of the cash outflows and the net present value (NPV). f. There is inconsistent ranking. Explain this in words and also using a calculation of the NPV and the IRR of the difference between projects A and B, the difference between projects B and C, and the difference between projects A and C. 1