Question: Thomas Company is considering two mutually exclusive projects. The firm, which has a cost of capital of 13%, has estimated its cash flows as shown

Thomas Company is considering two mutually exclusive projects. The firm, which has a cost of capital of 13%, has estimated its cash flows as shown in the following table:

A.) The NPV OF project A is ____. Is it acceptable?

B.) The NPV OF project B is ____. Is it acceptable?

C.) The IRR of project A is ___%. Is it acceptable?

D.) The IRR of project B is ___%. Is it acceptable?

Project A Project B
Initial investment $140,000 $100,000
Year Cash inflows
1 $25,000 $50,000
2 $35,000 $35,000
3 $50,000 $30,000
4 $50,000 $20,000
5 $60,000 $10,000

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