Question: There are two mutually exclusive projects under active consideration of a company. Both the projects have a life of 5 years and have initial cash

There are two mutually exclusive projects under active consideration of a company. Both the projects have a life of 5 years and have initial cash outlays of $100,000 each. The company pays tax at 50% rate and the maximum required rate of company has been given as 10%. The straight line method of depreciation will be charged on the projects. The projects are expected to generate a net cash flow before taxes as follows: Required: With the help of the above given information, calculate. a. The pay-back period of each project b. The average rate of return of each project The net present value of each project

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