Question: Leonard Inc. is considering Projects A and B, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and not repeatable. The

Leonard Inc. is considering Projects A and B, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and not repeatable. The WACC is 8.75%. a. Calculate the NPV and IRR.

Year

0

1

2

3

4

CFS

$1,100

$375

$375

$375

$375

CFL

$2,200

$725

$725

$725

$725

b. Also calculate the following: Payback Period Discounted Payback Profitability Index MIRR Compare and discuss each method and which projects should be selected and why.

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