Question: Two projects being considered are mutually exclusive and have the following projected cash flows: Year Project A Project B 0 -$55,000 -$55,000 1 17,220 0

Two projects being considered are mutually exclusive and have the following projected cash flows: Year Project A Project B 0 -$55,000 -$55,000 1 17,220 0 2 17,220 0 3 17,220 0 4 17,220 0 5 17,220 105,650 a) Calculate each projects Payback, NPV and IRR. The required rate of return for the two projects is 8 percent. Payback A= Payback B= NPV A= NPV B= IRR A= IRR B= b) Which of the two projects would be chosen according to the IRR criterion? And according to the NPV criterion?

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