Solution-Compute the net present value for farrah

Compute the net present value for farrah corporation

Reference no: EM132642897

Farrah Corporation is considering two projects (see below). For your analysis, assume these projects are mutually exclusive with a required rate of return of 12%.

	Project 1	Project 2
Initial investment	$185,000	$1,100,000
Cash inflow Year 1	$230,000	$1,450,000

Question 1: Compute the following for each project:

NPV (net present value)
PI (profitability index)
IRR (internal rate of return)

Question 2: Which project should be selected? Why?

Reference no: EM132642897

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Compute the net present value for farrah corporation

Reference no: EM132642897

Reference no: EM132642897

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