US Corp. is charged with determining which small projects should be funded. Along with  this assignment, she has been granted the use of $15,000 for a maximum of two years.  She is considering three projects. Project A costs $7,500 and has cash flows of $4,000 a  year for Years 1 to 3. Project B costs $8,000 and has cash flows of $3,000, $4,000, and  $3,000 for Years 1 to 3, respectively. Project C costs $2,000 and has a cash inflow of  $2,500 in Year 2. 

1. What decisions should she make regarding these projects if she assigns  them a mandatory discount rate of 8.5 percent? 

Find NPV and IRR. What are the  decisions if the projects were independent? Mutually Exclusive? Explain why.

Answer rating: 100% (QA)

To determine whether to fund these projects and to compare them you can calculate the Net Present Value NPV and Internal Rate of Return IRR for each p... View the full answer