Question: Trident Corp. is evaluating two independent projects. The costs and expected cash flows are given in the following table. The companys cost of capital is

Trident Corp. is evaluating two independent projects. The costs and expected cash flows are given in the following table. The companys cost of capital is 10 percent.

Year A B

0 $(312,500) $(395,000)

1 $121,450 $153,552

2 $121,450 $158,711

3 $121,450 $166,220

4 $121,450 $132,000

5 $121,450 $122,000

a. Calculate the projects NPV.

b. Calculate the projects IRR.

c. Which project should be chosen based on NPV? Based on IRR? Is there a conflict?

d. If you are the decision maker for the firm, which project or projects will be accepted? Explain your reasoning.

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