Two projects being considered are mutually exclusive and have the following projected cash flows:
Project A Project B
Year Cash Flow Cash Flow
0 -$50,000 -$50,000
1 15,625 0
2 15,625 0
3 15,625 0
4 15,625 0
5 15,625 99,500
If the required rate of return on these projects is 10 percent, find
a. which project has the higher NPV.
NPVa=
NPVb=
b. which project has the higher IRR.
IRRa=
IRRb=
which project has the higher MIRR.
MIRRa =
MIRRb =
Which project should be accepted by the company? Why?