Question: Net present value and mutually exclusive projects. The Larson Company must choose between two mutually exclusive projects. The cost of capital is 12 percent. Given

Net present value and mutually exclusive projects. The Larson Company must choose between two mutually exclusive projects. The cost of capital is 12 percent.

Given the following data, which project should Larson choose, and why? After-Tax Cash Flows, End of Year Project Label D 1 M N.

After-Tax Cash Flows, End of Year Project Label D 1 M N. 2 3 $400.000 195,000 60,000 $(500,000) $175,000 $287,500 (450.000) 477.000

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