Question: Question 5 Consider the cash flows for Project C and Project D: Year Project C Project D 0 -90000 -110000 1 22000 25000 2 27000

Question 5

Consider the cash flows for Project C and Project D:

Year

Project C

Project D

0

-90000

-110000

1

22000

25000

2

27000

30000

3

32000

35000

4

37000

40000

5

42000

45000

6

47000

50000

Requirements:

  1. Calculate the NPV for both projects with a discount rate of 9%.
  2. Determine the IRR for each project.
  3. Calculate the payback period for both projects.
  4. Discuss the selection of projects if they are independent.
  5. Discuss the selection of projects if they are mutually exclusive.

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