A company is evaluating two equal risky projects, S & L. Project S cost $2,050 and have cash inflows of $750, $760, $770, and $780 in years 1,2,3, and 4, respectively. Project L, costs $4,300 and have cash inflows of $1,500, $1,518, $1,536, and $1,554 in years 1,2,3, and 4 , respectively. The cost of Capital for both projects is 11%.
What is the NPV and IRR of project S? What is the NPV and IRR for Project L?
Is there a conflict between NPV and IRR, if the WACC is 11%
What is the Cross Over point for these mutually Exclusive Projects?