Consider the following cashflow of the two mutually exclusive projects. Assume that the discount rate for both projects is 10%. Year Project A Project B O -$380,000 -$625,000 1 292,000 396,000 2 165,000 319,000 3 107,000 204,000 1) Please fill in the following table Project A Project B NPV IRR 2) Based on the NPV, which project should be chosen?

Consider the following cashflow of the two mutually exclusive projects. Assume that the discount rate for both projects is 10%. Year Project A Project B O -$380,000 -$625,000 1 292,000 396,000 2 165,000 319,000 3 107,000 204,000 1) Please fill in the following table Project A Project B NPV IRR 2) Based on the NPV, which project should be chosen?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section: Chapter Questions

Problem 15P

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