All techniques conflicting rankingsnbsp nicholson roofing

Reference no: EM13381287

All techniques, conflicting rankings. Nicholson Roofing Materials, Inc., is considering two mutually exclusive projects, each with an incremental cost of $150,000. The company's board odirectors has set a 4-year payback requirement and the company's cost of capital is 9 percent. The cash inflows associated with the two projects are as follows:

Year	Project A cash inflows (CFt)	Project B cash inflows (CFt)
1	$45,000	$75,000
2	45,000	60,000
3	45,000	30,000
4	45,000	30,000
5	45,000	30,000
6	45,000	30,000

a. Calculate the payback period for each project.

b. Calculate the NPV of each project.

c. Calculate the IRR of each project.

d. Rank the project using each of the techniques. Make and justify a recommendation.

Reference no: EM13381287

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