Question: how to answer question 5 a) and b) QUESTION 5 Johnson Tan is considering two potential projects, Project A and Project B for investment. The

 how to answer question 5 a) and b) QUESTION 5 Johnson

how to answer question 5 a) and b)

Tan is considering two potential projects, Project A and Project B for

QUESTION 5 Johnson Tan is considering two potential projects, Project A and Project B for investment. The The internal rate of return (IRR) of Project A and Project B are 12 percent per year and 15 percent per year respectively. Both projects require initial capital in year 0 and having cost of capital of 5 percent per year. (a) Determine the initial capital of Project A and Project B. (b) If Project A and Project B are mutually exclusive, calculate the Net Present Value (N.P.V.) of Project A and Project B. Recommend to Johnson Tan the project he should choose using Net Present Value (NPV)method

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