Question: A company is thinking about two different modifications to its current manufacturing process. The after-tax cash flows associated with the two investments follow: The company's

A company is thinking about two different modifications to its current manufacturing process. The after-tax cash flows associated with the two investments follow:

The company's cost of capital is 10 percent.
Required:
1. Compute the NPVand the IRR for each investment.
2. Explain why the project with the larger NPV is the correct choice for thecompany.

Year Project i Project II $(100,000) (100,000) 63,857 63,857 134,560

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