Tracy Corp. is considering Projects Meems and Eliza. The required return for each project is 11.4 percent.  Calculate the NPV for each project.   Which project should be accepted using NPV?  Calculate the IRR for each project.  Which project should be accepted using IRR?  Calculate the profitability index for each project. Which project should be accepted? Why?  Is it necessary to calculate the PI?  Why or why not?

 

Year                0          1          2          3          4

CF Meems       -3,578  1,234   2,654   4,567   9,870

CF Eliza       -4,567  3,999   3,258   3,698   6,789

($ millions)    

Answer rating: 100% (QA)

Project Evaluation for Tracy Corp We can evaluate Projects Meems and Eliza using various capital budgeting techniques Net Present Value NPV Discount R... View the full answer