Question: Question 2 Scenario: Consider the following cash flows for Projects M and N: Year Project M Project N 0 -60000 -100000 1 15000 25000 2

Question 2

Scenario: Consider the following cash flows for Projects M and N:

Year	Project M	Project N
0	-60000	-100000
1	15000	25000
2	12000	30000
3	10000	27000
4	9000	35000
5	7000	40000
6	6000	45000

Requirements: a. Calculate the NPV for each project with a required rate of return of 12 percent. b. Find the IRR for each project. c. Determine the traditional payback period for each project. d. Which project should be selected if they are independent? e. Which project should be selected if they are mutually exclusive?

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