Tutak Industries is considering a project requiring an initial investment of $200,000 followed by annual cash inflows

Question:

Tutak Industries is considering a project requiring an initial investment of $200,000 followed by annual cash inflows of $45,000 for the next six years. A second six-year project has an initial outlay of $325,000.
a. How much would the second project have to generate in annual cash flows to have the same IRR as the first?
b. If Tutak’s is 8%, how much would the second project have to generate in annual cash flows to have the same NPV as the first project?

Cost Of Capital
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of...