Calculate the npv and irr for both projects

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End of Year Project R Cash Flow ($) Project S Cash Flow ($)
0 $-90,000 $-90,000

1 17,000 0

2 17,000 0

3 17,000 0

4 17,000 0

5 17,000 0

6 17,000 34,000

7 17,000 34,000

8 17,000 34,000

9 17,000 34,000

10 17,000 90,000

Both projects have an appropriate risk adjusted discount rate of 7 percent.

Required:

a. Calculate the NPV and IRR for both projects

b. If projects R and S are independent, which will you undertake?

c. If projects R and S are mutually exclusive, which will you undertake?

Reference no: EM132608877

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