Calculate each project net present value

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Question - You are a financial analyst for the Brittle Company. The director of capital budgeting has asked you to analyze two proposed capital investments: Projects X and Y. Each project has a cost of $10,000, and the cost of capital for each is 12%. The projects' expected net cash flows are shown in the table below.

Expected Net Cash Flows

Year Project X Project Y

0 - $10,000. - $10,000

1 6,500. 3,500

2 3,000 3,500

3 3,000 3,500

4 1,000 3,500

- Calculate each project's net present value (NPV), internal rate of return (IRR), modified internal rate of return (MIRR), and profitability index (PI).

- Which project or projects should be accepted if they are independent?

- Which project or projects should be accepted if they are mutually exclusive?

Reference no: EM133000781

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