Question: Question 7 Cash flows for Project G and Project H are as follows: Year Project G Project H 0 -95000 -125000 1 28000 32000 2

Question 7

Cash flows for Project G and Project H are as follows:

Year

Project G

Project H

0

-95000

-125000

1

28000

32000

2

30000

35000

3

35000

40000

4

38000

42000

5

40000

45000

6

45000

48000

Requirements:

  1. Calculate the NPV for both projects with a discount rate of 10%.
  2. Determine the IRR for each project.
  3. Calculate the payback period for both projects.
  4. Analyze and decide which project(s) should be selected if they are independent.
  5. Analyze and decide which project should be selected if they are mutually exclusive.

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