Consider the following two mutually exclusive projects with


Consider the following two mutually exclusive projects with a 15% cost of capital:

Year                CF Project A                           CF Project B

0                      -$350,000                               -$50,000

1                            45,000                                  24,000

2                            65,000                                  22,000

3                            65,000                                  19,500

4                          440,000                                  14,600

Using the payback method, which project would you choose? Why?

Using NPV, which project will you choose? Why?

Using IRR, which project will you choose? Why?

Using the PI, which project will you choose? Why?

Based on your answers in (a) through (e), which project will you choose? Why?

If the projects are independent, what is your decision? Why?

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Financial Management: Consider the following two mutually exclusive projects with
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