Question: Project A and B are mutually exclusive projects. Both projects have an estimated life of four years. Cash flows for both projects are given as

Project A and B are mutually exclusive projects. Both projects have an estimated life of four years. Cash flows for both projects are given as follows. Calculate the Payback period, NPV, IRR, MIRR and PI for project A and project B. Assume a 15% required rate of return. What is your best decision based on all these calculations. You must justify this answer.
Project A Project B
Year 0-$15,000-$30,000
Year 1 $ 5,000 $12,000
Year 2 $ 6,000 $11,000
Year 3 $ 7,000 $10,000
Year 4 $ 8,000 $ 9,000
No excel plz

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!