For each project compute the npv at 12 percent cost of

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Mutually Exclusive Investments. The Wan-Ki Manufacturing Company must decide between investment projects A and B, which are mutually exclusive. The data on these projects are as follows (in thousands of dollars):

Cash Flows, per Year

Project

0

1

2

3

4

A

(100)

$120.00




B

(100)




$193.80

(a) For each project, compute the NPV at 12 percent cost of capital, and the IRR. (b) Explain why the rankings conflict. Recommend which project should be chosen.

Reference no: EM13574610

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