Question: Suppose that you are considering two mutually-exclusive Projects: A and B. MARR = 15% Project A Year 0 Investment Payback Cash Flow NPW at MARR

 Suppose that you are considering two mutually-exclusive Projects: A and B.

Suppose that you are considering two mutually-exclusive Projects: A and B. MARR = 15% Project A Year 0 Investment Payback Cash Flow NPW at MARR $ 300 -300 -300.00 0 $ 500 500 378.07 IRR = 29.099% 78.07 PW@MARR 0.00 Project B Year O 1 Investment Payback Cash Flow NPW at MARR $ 1,000 -1000 -1,000.00 0.00 $ 1,425.75 1425.75 1,078.07 IRR = 19.405% 78.07 PW@MARR Given a MARR of 15%, which Project would you choose? a) Project A because it has the higher IRR? b) Project B because it has the higher cash flow at the end of Year 2? c) Select either A or B as they have the same PW at the given MARR? d) None of the above, have to consider other factors such as relative risk. Explain your choice and show the financial analysis to support that conclusion. Suppose that you are considering two mutually-exclusive Projects: A and B. MARR = 15% Project A Year 0 Investment Payback Cash Flow NPW at MARR $ 300 -300 -300.00 0 $ 500 500 378.07 IRR = 29.099% 78.07 PW@MARR 0.00 Project B Year O 1 Investment Payback Cash Flow NPW at MARR $ 1,000 -1000 -1,000.00 0.00 $ 1,425.75 1425.75 1,078.07 IRR = 19.405% 78.07 PW@MARR Given a MARR of 15%, which Project would you choose? a) Project A because it has the higher IRR? b) Project B because it has the higher cash flow at the end of Year 2? c) Select either A or B as they have the same PW at the given MARR? d) None of the above, have to consider other factors such as relative risk. Explain your choice and show the financial analysis to support that conclusion

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