Considering new inventory system

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Siegmeyer Corp. is considering a new inventory system, Project A will cost $750,000. The system is expected to generate positive cash flows over the next four years in the amounts of $350,000 in year one, $325,000 in year two, $150,000 in year three, and $180,000 in year four. Siegmeyer’s required rate of return is 8%. Suppose Siegmeyer identifies another mutually exclusive project, Project B, with a net present value of $98,525.50 and IRR of 17.33%. If neither project can be replaced, compared to the values calculated in Problems 7 (NPV = $104,089.40) and 8 (IRR = 15.13%)

Siegmeyer should accept which project(s) (A, B, both or neither) and why?

Reference no: EM132032501

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