Calculate payback period-NPV and IRR for each project

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Reference no: EM131939788

A firm with a 12% WACC is evaluating two projects for this year’s capital budget. After-tax cash flows, including depreciation, are as follows:

0 1 2 3 4 5

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Project A -16,000 5,000 5,000 5,000 5,000 5,000

Project B -27,000 8,200 8,200 8,200 8,200 8,200

Calculate payback period, NPV, and IRR for each project. Assuming the projects are independent, which one or ones would you recommend? If the projects are mutually exclusive, which would you recommend?

Reference no: EM131939788

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