Computation of selection of the project

Reference no: EM1314167

Jekyll & Hyde Corp. is evaluating two mutually exclusive projects. Their cost of capital is 15 percent. Costs and cash flows are given in the following table. Which project should be accepted?

*Year*	*Cash flow*
*Year*	*Project 1*	*Project 2*
0	$ (1,250,000)	$ (1,250,000)
1	$ 250,000	$ 350,000
2	$ 350,000	$ 350,000
3	$ 450,000	$ 350,000
4	$ 500,000	$ 350,000
5	$ 750,000	$ 350,000

Reference no: EM1314167

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