Question: P10-25 All techniques with NPV profile: Mutually exclusive projects Projects A and B of equal risk, are alternatives for expanding Rosa Company's capacity. The firm's
P10-25 All techniques with NPV profile: Mutually exclusive projects Projects A and B of equal risk, are alternatives for expanding Rosa Company's capacity. The firm's cost of capital is 13%. The cash flows for each project are shown in the following table a. Calculate each project's payback period. b. Calculate the net present value (NPV) for each project. c. Calculate the internal ra d. Draw the net pre f return (IRR) for each project. alue profiles for both projects on the same axes, and discuss any conflict in ranking that may exist between NPV and IRR Summarize the preferences dictated by each measure, and indicate which project you would recommend. Explain why e. Project A Project B Initial investment (CFo) -$80,000 -$50,000 Yea Cash inflows (CF) $15,000 20,000 25,000 30,000 35,000 $15,000 15,000 15,000 15,000 15,000
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