Problem: Given on Project A and Project B, both 4 yr. projects:
Project A Project B
Investment $750,000 $900,000
4 yrs. C/F (1) $200,000 (1) $300,000
(2) $250,000 (2) $325,000
(3) $275,000 (3) $200,000
(4) $300,000 (4) $250,000
k = 10% 9%
Calculate for both projects Accounting payback, Financial payback, NPV, & IRR. For each project, should you go ahead with investment and why or why not? And if project were mutually exclusive, which one, if either should you invest in and why?