Question: Company YZA is considering two mutually exclusive projects with the following cash flows: Year Project I Project J 0 -$90,000 -$100,000 1 $20,000 $25,000 2
Company YZA is considering two mutually exclusive projects with the following cash flows:
Year | Project I | Project J |
0 | -$90,000 | -$100,000 |
1 | $20,000 | $25,000 |
2 | $20,000 | $25,000 |
3 | $20,000 | $25,000 |
4 | $20,000 | $25,000 |
5 | $20,000 | $130,000 |
- Calculate the NPV at a discount rate of 10%.
- Determine the IRR.
- Calculate the payback period.
- Evaluate which project should be chosen based on financial metrics and any other relevant considerations.
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