How to calculate each project net present value

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You are a financial analyst for the Brittle Company. The director of capital budgeting has asked you to analyze two proposed capital investments: Projects X and Y. Each project has a cost of $10,000, and the cost of capital for each is 12%. The projects' expected net cash flows are shown in the table below.

Expected Net Cash Flows

Year                  Project X                   Project Y

0                       - $10,000                  - $10,000

1                          6,500                        3,500

2                        3,000                           3,500

3                        3,000                           3,500

4                           1,000                          3,500

Question 1: Use the Homework Student Workbook to calculate each project's net present value (NPV), internal rate of return (IRR), modified internal rate of return (MIRR), and profitability index (PI).

Question 2: Which project or projects should be accepted if they are independent?

Question 3: Which project or projects should be accepted if they are mutually exclusive?

Reference no: EM132588190

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