Question

Kilroy, Inc. is considering two mutually exclusive projects. The cash flows of the projects are as...

Kilroy, Inc. is considering two mutually exclusive projects. The cash flows of the projects are as follows:

Year

Project A

Project B

0

-$2,000,000

-$2,000,000

1

500,000

2

500,000

3

500,000

4

500,000

5

500,000

6

500,000

7

500,000

5,650,000

a. Compute the NPV and IRR for the above two projects, assuming a 13% required rate of return. NPV for project A=

b. Discuss any potential conflict in evaluating these candidate projects.

c. What decision should be made regarding these two projects?

using this formula

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