Question: Question 2 (20) Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 -$300,000 20,000 50,000 -$40,000 19,000 1 2

Question 2 (20) Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 -$300,000 20,000 50,000 -$40,000 19,000 1 2 12,000 3 50,000 18,000 4 390,000 10,500 Whichever project you choose, if any, you require a 15 percent return on your investment. 1. Calculate the payback period, discounted payback period, PI, internal rate of return, and net present value of the projects. Also tell which project you will choose based on each criterion and which project you will choose overall. 2. Make NPV profile chart and find cross-over point. Also explain criteria for accepting rejecting the project based on discount rate. WE Page 2 of 2 Assis
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