Calculate npv of each project and assess its acceptability

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Reference no: EM131989565

Problem

Thomas Company is considering two mutually exclusive projects. The? firm, which has a cost of capital of 8?%, has estimated its cash flows as shown in the following? table:

Initial investment (CF0?)     Project A      Project B
                                        $150,000       $79,000
Year (t)                                  Cash inflows (CFt?)
1                                      $35,000        $40,000
2                                       $30,000         $30,000
3                                       $50,000         $25,000
4                                       $55,000         $25,000
5                                       $70,000         $5,000

a. Calculate the NPV of each project, and assess its acceptability.
b. Calculate the IRR for each project, and assess its acceptability.

Reference no: EM131989565

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