Question: AB Lean has identified two mutually exclusive projects with the following cash flows. Year 0 1 2 3 4 5 Cash Flow Project A-52,000.0025,000.0017,000.0014,000.0012,000.009,000.00 Cash

AB Lean has identified two mutually exclusive projects with the following cash flows.

Year 0 1 2 3 4 5

Cash Flow Project A-52,000.0025,000.0017,000.0014,000.0012,000.009,000.00

Cash Flow Project B-52,000.0017,800.0017,000.0016,000.0017,000.0022,000.00

The company requires a 12.5% rate of return from projects of this risk.

What is the NPV of project A?

  1. a.1,624.90
  2. b.1,395.64
  3. c.5,972.87
  4. d.972.57
  5. e.417.37
  6. f.5,180.35

What is the IRR of project B?

a.14.68%

b.12.06%

c.12.94%

d.20.80%

e.13.05%

f.13.90%

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