Question: please answer with details Decision making criteria: 5). If mutually exclusive following projects ( A and B ) with normal cash flows are being analysed,

please answer with details
Decision making criteria: 5). If mutually exclusive following projects ( A and B ) with normal cash flows are being analysed, the net present value (NPV) and internal rate of return (IRR) methods agree. If the weighted average cost of capital (WACC)/di scounted cash flow for each project is 18%, do the NPV and IRR methods agree or conflict? Please note the given, WACC @18% can be taken as discounting factor. Also note that whenever a person taking a capital budgeting decision, NPV (Net Present Value) method and IRR (Internal Rate of Return) method are commonly used methods for evaluating various investing options. Please give your decision based on this criterion. (1) Calculate the NPV (net present value), IRR (internal rate of return), PI (profitability index) and PBP (payback period). (20-points each) (2) Rank the two projects, which one is the better one. (10-points for the ranking and 10points for choosing the better project)
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
