A firm with cost of capital of 10% is evaluating two mutually exclusive projects, X and...

 

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A firm with cost of capital of 10% is evaluating two mutually exclusive projects, X and Y. The initial investment is R350 000 for project X and R425 000 for project Y. Cash inflows associated with the two projects are given below. Year Project X Project Y Cash inflows (R) Cash inflows (R) 1 140 000 175 000 2 165 000 150 000 3 190 000 125 000 4 100 000 5 75 000 6 50 000 REQUIRED: 2.1 Which project should the firm choose, based on their Annualised NPVs? (12 marks) A firm with cost of capital of 10% is evaluating two mutually exclusive projects, X and Y. The initial investment is R350 000 for project X and R425 000 for project Y. Cash inflows associated with the two projects are given below. Year Project X Project Y Cash inflows (R) Cash inflows (R) 1 140 000 175 000 2 165 000 150 000 3 190 000 125 000 4 100 000 5 75 000 6 50 000 REQUIRED: 2.1 Which project should the firm choose, based on their Annualised NPVs? (12 marks)