Question: please answer all questions. each question is a follow up of the previous. You are considering two mutually exclusive investment opportunities: Year 0 Year 1

You are considering two mutually exclusive investment opportunities: Year 0 Year 1 Year 2 Discount Project Cash Flow Cash Flow Cash Flow Rate A -$29,000 $35,000 $10,000 8% B -$210,000 $30,000 $290,000 9% With the given annual cash flow schedule, what are the NPVs of project A and project B? O A. NPV for Project A: $11,980.8; NPV for Project B: $61,610.1 B. NPV for Project A: $22,632.2; NPV for Project B: $20,928.2 O C. NPV for Project A: $19,980.8; NPV for Project B: $31,610,1 D. NPV for Project A: $15,632.2; NPV for Project B: $50,928.2 Using the information provided in the previous question, what are the IRRs of project A and project B? A. IRR for Project A: 37.15%; IRR for Project B: 21.87% B. IRR for Project A: 44.54%; IRR for Project B: 24.87% C. IRR for Project A: 32.19%; IRR for Project B: 44.74% D. IRR for Project A: 25.5%; IRR for Project B: 35.5% Based on your answers for both questions asked, which project should you choose? Why? A. invest in project B, since NPV of Project B > NPV of Project A B. invest in project A, since NPV of Project A > 0 C. invest in project A, since NPV of Project B 0 E. invest in project B, since IRR of Project B > IRR of Project A
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
