Question: Bob corporation is evaluating two projects. Project A has $ 6 0 , 0 0 0 in upfront cost, and has after tax cash flows

Bob corporation is evaluating two projects. Project A has $60,000 in upfront cost, and has after tax cash flows of $12,000, $24,000, and $40,000 during the first three years. Project capital B has $90,000 in upfront cost, and has after tax cash flows of $18,000, $32,000, and $62,000. The companies WACC is 5%. A) what is the NPV and IRR for project A? B) What is the NPV and IRR for porject B? C) if the projects are independent, should the company do either or both of them? D) if the projects are mutually exclusive, which, if either should it do?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!