Question: For the given cash flows below, assume the cash flow is the same in the next 2 years. Compute the NPV for each project, and

For the given cash flows below, assume the cash flow is the same in the next 2 years. Compute the NPV for each project, and compute the incremental IRR. Compare and explain why NPV always gives the correct decision.

Project Initial Investment Year 1 Cash Flow A 500,000 500,000 125,000 120,000

What is the best way to select a project that has resource restrictions? Explain.

Project Initial Investment Year 1 Cash Flow A 500,000 500,000 125,000 120,000

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