The companys cost of capital is 10 percent and it can get


A company is analyzing two mutually exclusive projects, S and L, whose cash flows are shown below:

0 1 2 3 4

S -1,000 900 250 10 10

L -1,000 0 250 400 800

a. The company's cost of capital is 10 percent, and it can get an unlimited amount of capital at that cost. What are the NPVs of both projects? b. What is the payback period for each? c. What is the IRR of both projects? d. Which project would you accept?

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Financial Management: The companys cost of capital is 10 percent and it can get
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