You are faced with two projects and have the opportunity to invest in either one or...

 

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You are faced with two projects and have the opportunity to invest in either one or both of them. The cash flows are as follows. Project A B Year 0 - $400 $400 Year 1 $200 - $200 Your cost of capital is 7%. Evaluate both projects with NPV and IRR, and determine what to do. The NPV of project A is $ and the NPV of project B is $ so using the NPV rule, project should be selected. While the IRR of project A is % and the IRR of project B is %, project should be selected the cost of capital would be a good thing. because it is an unconventional project where an IRR (Round to two decimal places as needed.) You are faced with two projects and have the opportunity to invest in either one or both of them. The cash flows are as follows. Project A B Year 0 - $400 $400 Year 1 $200 - $200 Your cost of capital is 7%. Evaluate both projects with NPV and IRR, and determine what to do. The NPV of project A is $ and the NPV of project B is $ so using the NPV rule, project should be selected. While the IRR of project A is % and the IRR of project B is %, project should be selected the cost of capital would be a good thing. because it is an unconventional project where an IRR (Round to two decimal places as needed.)

Answer rating: 100% (QA)

To evaluate both projects we will calculate the Net Present Value NPV and Internal Rate of Return IR... View the full answer