Compute internal rate of return and net present value

Reference no: EM13901199

After-tax cash flows for two mutually exclusive projects (with economic lives each) are:

Year	Project X	Project Y
0	$(12,000)	$(12,000)
1	5,000	0
2	5,000	0
3	5,000	0
4	5,000	25,000

The company's cost of capital is 10 percent. Compute the following:

1. The internal rate of return for each project.

2. The net present value for each project.

3. Which project should be selected? Why?

Reference no: EM13901199

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