FIN 3600
Module 6 Assignment 2: Applying Capital Budgeting Techniques to Analyze Projects
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For full credit, you must show your work
Main Capital Incorporated is considering two mutually exclusive projects. The company's discount rate is 10% and its payback period is 3 years. Using excel, calculate the payback period, NPV and IRR for each project. Determine whether Main Capital should accept or reject the projects under each technique. Explain why.
Cash Flows	Project A	Project B
Initial cash outflow	-400,000	-600,000
The 1	55,000	300,000
The 2	55,000	300,000
The 3	55,000	50,000
The 4	225,000	50,000
The 5	225,000	49,000
Provide answers in the boxes below. Work can be shown in the formula cell or off to the side.
Payback Period
Accept?
Why?
NPV
Accept?
Why?
IRR
Accept?
Why?