Assigned task of evaluating two mutually exclusive projects

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Reference no: EM131844076

?1. (Mutually exclusive projects and NPV?) You have been assigned the task of evaluating two mutually exclusive projects with the following projected cash? flows:

YEAR PROJECT A CASH FLOW PROJECT B CASH FLOW

0 -90,000 -90,000

1 37,000 0

2 37,000 0

3 37,000 0

4 37,000 0

5 37,000 210,000

If the appropriate discount rate on these projects is 11 percent, which would be chosen and? why?

What is the NPV of project? A? $? (Round to the nearest? cent.) ANSWER:

What is the NPV of project? B? $(Round to the nearest? cent.) ANSWER:

Which project would be chosen and? why? ?

A. Cannot choose without comparing their IRRs.

B. Choose Upper A because its NPV is higher.

C. Choose both because they both have positive NPVs.

D. Choose Upper B because its NPV is higher.

Reference no: EM131844076

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