A company is considering two investment projects, A and B, with the following cash flows: Project A:
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Question:
- A company is considering two investment projects, A and B, with the following cash flows:
Project A:
- Year 1: $10,000
- Year 2: $15,000
- Year 3: $20,000
Project B:
- Year 1: $12,000
- Year 2: $16,000
- Year 3: $18,000
The company requires a 10% rate of return on its investments. Calculate the net present value (NPV) of each project and determine which project is more attractive.
2.A company wants to determine the internal rate of return (IRR) for a project with the following cash flows:
- Year 1: -$100,000 (initial investment)
- Year 2: $35,000
- Year 3: $45,000
- Year 4: $55,000
Related Book For
Financial and Managerial Accounting Using Excel for Success
ISBN: 978-1111993979
1st edition
Authors: James Reeve, Carl S. Warren, Jonathan Duchac
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