Project P costs $15,000 and is expected to produce benefits (cash flows) of $4,500 per year for five years. Project Q costs $37,500 and is

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Project P costs $15,000 and is expected to produce benefits (cash flows) of $4,500 per year for five years. Project Q costs $37,500 and is expected to produce cash flows of $11,100 per year for five years.

a. Calculate the NPV, IRR, MIRR, discounted payback, and traditional pay- back period for each project, assuming a required rate of return of 14 percent.

b. If the projects are independent, which project(s) should be selected? If they are mutually exclusive projects, which project should be selected?


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a Using a financial calculator NPV P 44886 NPV Q 60720 IRR ... View full answer

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