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

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

Skiba€™s cost of capital is 10 percent.
Required:
1. Compute the NPV and the IRR for each investment.
2. Explain why the project with the larger NPV is the correct choice for Skiba.

Project l $(100,000) 134,560 Year Project ll $100,000) 63,857 63,857 2

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