Question: MegaGrand is considering the following two projects which are mutually exclusive. The cost of capital is 15% a. Calculate the NPV, profitability index (PI) and

MegaGrand is considering the following two projects which are mutually exclusive.

MegaGrand is considering the following two projects which are mutually exclusive. The cost of capital is 15% a. Calculate the NPV, profitability index (PI) and IRR of the two projects. (18 marks) b. MegaGrand has enough money on hand to undertake either project, but can choose only one of the two as they are mutually exclusive. Which project should the company choose? Justify your answer. (6 marks) c. Suppose suddenly MegaGrand has difficulty in accessing the capital markets. Which project should it choose? (6 marks)

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