a)
To determine:
Introduction: Net present value refers to the difference between the present value of
b)
To determine:
Introduction: Internal rate of return refers to the minimum rate or hurdle rate at which NPV is zero. Net present value refers to the difference between the present value of cash inflows and the present value of cash outflows based on the discounted rate.
c)
To determine: Discounted Payback period for project A and project B and selection of the project if they are independent and mutually exclusive.
Introduction: Discounted payback period refers to the payback period which accounts for discounted cash flows. It overcomes the drawback of traditional payback period method where present value factor is ignored.
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