Compute the payback period and the IRR-NPV

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Consider the following two mutually exclusive projects, X and Y, and their cash flows information, Project Year 0 Year 1 Year 2 Year 3 Year 4 X ($1,400) $350 $750 $650 $650 Y ($1,000) $300 $400 $500 $600

(a) Assume that the discount rate is 12%, compute the payback period, the IRR, NPV and PI of project X.

(b) Use the McKinsey’s approach to compute the Modified IRR (MIRR) for project X.

Reference no: EM131185224

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