A company is evaluating two projects Project E Initial Investment $1,200,000 Year 1 $300,000 Year 2 $400,000 Year 3 $500,000 Year 4 $600,000 Project F Initial Investment $1,500,000 Year 1 $350,000 Year 2 $450,000 Year 3 $550,000 Year 4 $650,000 a Calculate the payback period for each project b Determine the NPV at a 6 discount rate c Compute the IRR for both projects d Based on these calculations, which project should the company invest in Provide your reasoning

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Question: A company is evaluating two projects: Project E Initial Investment: $1,200,000 Year 1: $300,000 Year 2: $400,000 Year 3: $500,000 Year 4: $600,000 Project F

A company is evaluating two projects:

Project E

Initial Investment: $1,200,000
Year 1: $300,000
Year 2: $400,000
Year 3: $500,000
Year 4: $600,000

Project F

Initial Investment: $1,500,000
Year 1: $350,000
Year 2: $450,000
Year 3: $550,000
Year 4: $650,000

a. Calculate the payback period for each project. b. Determine the NPV at a 6% discount rate. c. Compute the IRR for both projects. d. Based on these calculations, which project should the company invest in? Provide your reasoning.

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