Question: The following net cash flows are projected for two separate projects. Your required rate of return is 12%. Year Project A Project B 0 ($150,000)

The following net cash flows are projected for two separate projects. Your required rate of return is 12%.

Year Project A Project B
0 ($150,000) ($400,000)
1 30,000 100,000
2 30,000 100,000
3 30,000 100,000
4 30,000 100,000
5 30,000 100,000
6 30,000 100,000
  1. Calculate the payback period for each project.
  2. Calculate the NPV of each project.
  3. Calculate the IRR of each project.
  4. Which project(s) would you accept and why?

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