Two mutually exclusive projects are under consideration. Year Project A 10 -$5,000 1 2 $1,000 $3,000...

 

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Two mutually exclusive projects are under consideration. Year Project A 10 -$5,000 1 2 $1,000 $3,000 3 $5,000 4 $7,000 5 $9,000 (a) Which project should be selected if the simple payback method is used to make the determination? [Show the plot!] $2,750 $2,750 Project B -$9,000 $2,750 $2,750 $2,750 (b) Which project should be selected if IRR is used? (c) Explain any differences in results. Two mutually exclusive projects are under consideration. Year Project A 10 -$5,000 1 2 $1,000 $3,000 3 $5,000 4 $7,000 5 $9,000 (a) Which project should be selected if the simple payback method is used to make the determination? [Show the plot!] $2,750 $2,750 Project B -$9,000 $2,750 $2,750 $2,750 (b) Which project should be selected if IRR is used? (c) Explain any differences in results.

Answer rating: 100% (QA)

payback period for project A Year Cash Flows 0 5000 1 2750 ... View the full answer