Question: Company is considering two mutually exclusive projects. The cash flows of the projects are as follows: Year Project A Project B 0 -$2,000,000 $2,000,000 1
Company is considering two mutually exclusive projects. The cash flows of the projects are as follows: Year Project A Project B 0 -$2,000,000 $2,000,000 1 500,000 2 500,000 3 500,000 4 500,000 5 500,000 6 500,000 7 500,000 5,650,000 a. Compute the NPV and IRR for the above two projects, assuming a 13% required rate of return. b. Discuss the ranking conflict. c. What decision should be made regarding these two projects
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