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Calculate the npv and irr of project

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Acme Engineering is evaluating two mutually exclusive investment projects, a nematic tube system between their warehouse and shipping departments, or a network-based inventory/invoice/tracking system. The nematic tube system has an initial cost of $50,000 while the network-based system would cost of $75,000. The firm's WACC is 15% and the projected Free Cash Flows are expected to be:

Year Nematic Tube System Network Based System

1 $15,000 $18,000

2 $15,000 $18,000

3 $15,000 $18,000

4 $15,000 $19,000

5 $15,000 $19,000

A. Calculate the NPV and IRR of each project.

B. Indicate which project would be more valuable to the firm.

Reference no: EM132842784

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