Question: Two projects being considered are mutually exclusive and have the following projected cash flows: (Compute both NPV and IRR). The cost of capital is 10%.

Two projects being considered are mutually exclusive and have the following projected cash flows: (Compute both NPV and IRR). The cost of capital is 10%.

Year Cash Flow A Cash Flow B

0 -$50,000 -$50,000

1 $15,625 $0

2 $15,625 $0

3 $15,625 $0

4 $15,625 $0

5 $15,625 $99,500

NPV= 1.(Cashflow A) 2.(Cashflow B)

IRR= 1. (Cashflow A) 2. (Cashflow B)

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