Question: Assume you are evaluating two mutually exclusive projects, the cash flows of which appear below, and that your company uses a cost of capital of
Assume you are evaluating two mutually exclusive projects, the cash flows of which appear below, and that your company uses a cost of capital of 8 percent to evaluate projects such as these. Time Project A Cash Flow Project B Cash Flow 0 -$650 -$700 1 100 300 2 250 -200 3 250 550 4 200 200 5 100 80 a. Calculate Payback for Project A b. Calculate Discounted Payback for Project A c. Calculate IRR for Project A d. Calculate MIRR for Project B e. Using the NPV method and assuming cost of capital of 8%, which project should be accepted? In Excel
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