Question: Your company is evaluating two potential projects. Project G requires an investment of $10,000,000 and is expected to yield annual cash flows of $2,500,000 for
Your company is evaluating two potential projects. Project G requires an investment of $10,000,000 and is expected to yield annual cash flows of $2,500,000 for the next six years. Project H requires an investment of $8,000,000 and will generate cash inflows of $2,000,000 annually for five years. Assuming a discount rate of 7%, determine the NPV and IRR for each project. Additionally, discuss the advantages and disadvantages of using NPV and IRR as investment appraisal techniques.
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