Trident Corp management is evaluating two independent projects The costs and expected cash flows are given in the following table The cost of capital is 10 percent a Calculate the projects NPV b Calculate the projects IRR c Which project should be chosen based on NPV Based on IRR Is there a conflic...

a Project A Cost of this project 312500 Annual cash flows 121450 Required rate of return k 10 Length ...

Trident Corp. management is evaluating two independent projects. The costs and expected cash flows are given in

Question:

Trident Corp. management is evaluating two independent projects. The costs and expected cash flows are given in the following table. The cost of capital is 10 percent.

Year Project B Project A -$312,500 -$395,000 1 121,450 153,552 121,450 158,711 3 121,450 166,220 4 121,450 132,000 121,4

a. Calculate the projects’ NPV.
b. Calculate the projects’ IRR.
c. Which project should be chosen based on NPV? Based on IRR? Is there a conflict?
d. If you are the decision maker for the firm, which project or projects will be accepted? Explain your reasoning.

Cost Of Capital
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of...

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