Question

Intro You've estimated the following cash flows (in $) for two mutually exclusive projects: Year Project...

Intro

You've estimated the following cash flows (in $) for two mutually exclusive projects:

Year Project A Project B
0 -5,500 -8,250
1 1,325 1,325
2 2,148 2,148
3 4,010 7,918

The required return for both projects is 8%.

   Attempt 1/10 for 10 pts.

Part 1

What is the IRR for project A?

Submit

   Attempt 1/10 for 10 pts.

Part 2

What is the IRR for project B?

Submit

   Attempt 1/5 for 10 pts.

Part 3

Which project seems better according to the IRR method?

Project B

Project A

Submit

   Attempt 1/10 for 10 pts.

Part 4

What is the NPV for project A?

Submit

   Attempt 1/10 for 10 pts.

Part 5

What is the NPV for project B?

Submit

   Attempt 1/5 for 10 pts.

Part 6

Which project seems better according to the NPV method?

Project A

Project B

Submit

   Attempt 1/5 for 10 pts.

Part 7

Compare the answers to parts 3 and 6. If both projects are mutually exclusive, which one should you accept?

Project B

Project A

Can you answer all parts?

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