Question: A firm is considering two projects with the following cash flows. The required return for both projects is 10 percent. Year Project C Project D

A firm is considering two projects with the following cash flows. The required return for both projects is 10 percent.

Year Project C Project D 0 -$550,000 -$150,000 1 255,000 70,000 2 398,000 70,000 3 154,000 65,000

Required - Using your calculator: a. Calculate the NPVs for both projects (4 marks) b. Calculate the IRRs for both projects (2 marks) c. Based on the above calculations, which project should the company choose if they are mutually exclusive? Explain. (3 marks)

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