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Calculate the IRR and the NPV for project

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Reference no: EM131878360

Consider the following mutually exclusive projects and their associated cash flows; the appropriate discount rate is 8%.

Project A T0 = -$38,000 T1 = 16,000 T2 = 22,000 T3 = 18,000 T4 = 14,000

Project B T0 = -$50,000 T1 = 24,000 T2 = 20,000 T3 = 20,000 T4 = 20,000

a) What is the payback period for Project A?

b) What is the payback period for project B?

c) Calculate the IRR and the NPV for project A.

d) Calculate the IRR and NPV for project B.

e) Calculate the IRR and the NPV for the incremental investment?

f) Which project is preferred?

g) Discuss any concerns you may have with the IRR for e.

Reference no: EM131878360

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