Question: Question 8 A company is evaluating two mutually exclusive projects. Project A requires an initial investment of $300,000 and will generate $80,000 annually for 5

Question 8

A company is evaluating two mutually exclusive projects. Project A requires an initial investment of $300,000 and will generate $80,000 annually for 5 years. Project B requires an initial investment of $400,000 and will generate $100,000 annually for 6 years. The company's cost of capital is 10%. Calculate for each project:

  1. Net Present Value (NPV).
  2. Internal Rate of Return (IRR).
  3. Payback Period.
  4. Discounted Payback Period.
  5. Profitability Index (PI).

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