Question: Q2. M/s Sons & Sons is considering two projects. A & B. with cash flows as shown below: Cash Flow of period Project A Project

 Q2. M/s Sons & Sons is considering two projects. A &

Q2. M/s Sons & Sons is considering two projects. A & B. with cash flows as shown below: Cash Flow of period Project A Project B 0 -90,000 -150,000 1 30,000 72.000 2 30,000 35,000 3 50,000 40,000 4 30,000 25,000 Calculate discounted payback period, net present value and internal rate of return for each project using opportunity cost of capital 13 % & 9% for project A & B respectively. (1 Marks) Which project(s) should be accepted if: (1 Marks) The projects are mutually exclusive and there is no capital constraint. The projects are independent and there is no capital constraint. The projects are independent and there is a total of $100,000 of financing for capital outlays in the coming period. Why the cost of capital for A might be higher than for B. State possible reason(s) (1Marks) a. b. (111) c

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