You will use the following information to answer three questions. You have been asked to analyze two
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Question:
You will use the following information to answer three questions.
You have been asked to analyze two proposed capital investments. The information related to each project is listed below.
Project A | Project B | |
Initial Cost | $300,000 | $500,000 |
Cash Flows | ||
Year 1 | $75,000 | $100,000 |
Year 2 | $75,000 | $110,000 |
Year 3 | $75,000 | $125,000 |
Year 4 | $75,000 | $140,000 |
Year 5 | $75,000 | $175,000 |
Salvage Value | $25,000 | $10,000 |
What is the NPV for Project A? Assume a corporate cost of capital rate of 6%. Use the format XXX,XXX.XX.
What is the IRR of Project A? Use the format XX.X%.
What is the MIRR of Project A? Use the format XX.X%.
What is the Profitability Index for Project A? Use the format XX.XX.
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