Consider the following two mutually exclusive projects Project A with an initial cost of $1000 and a return of $505 per year for 3 years with no salvage value Project B with an initial cost of $11000 and a return of $5000 per year for 3 years with no salvage value The minimum rate of return is 10 1 Which is the preferred project using NPV 2 Which is the preferred project using IRR 3 Discuss your evaluations if the two projects are independent

Question: Consider the following two mutually exclusive projects: Project A with an initial cost of $1000 and a return of $505 per year for 3

Consider the following two mutually exclusive projects:
• Project A with an initial cost of $1000 and a return of $505 per year for 3 years with no .
• Project B with an initial cost of $11000 and a return of $5000 per year for 3 years with no
The minimum rate of return is 10%.
1. Which is the preferred project using NPV?
2. Which is the preferred project using IRR?
3. Discuss your evaluations if the two projects are independent.

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