Question: Consider the following two mutually exclusive investment projects: Project A Cash flow Year 0 : -10,000 1: 5500 2:5500 3: 5500 Project B cash flow

Consider the following two mutually exclusive investment projects:

Project A Cash flow

Year 0 : -10,000

1: 5500

2:5500

3: 5500

Project B cash flow

0: -20,000

1: 0

2: 0

3: 40,000

The firm's MARR is 15%

(a)Evaluate the projects based on, PW, FW, and AE criterion.

(b)Find IRR for project A and B. Can you use the IRR criterion here?

(c)Find PW and IRR on the incremental investment

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