Make a brief memo advocating that the project

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Reference no: EM1330767

NPV, IRR, PI and Payback Period

There are two mutually exclusive projects under consideration by the BUILDERS-R-US Company:
Year Project A Project B
0 -30,000 -50,000
1 10,000 15,000
2 10,000 15,000
3 10,000 15,000
4 10,000 15,000

The cost of capital is 10%.
Calculate the following values for each project using the time value tables and Microsoft Excel.
A) NPV
B) IRR (round to the nearest whole percentage using Microsoft Excel "IRR" function.)
C) Profitability index
D) Payback period

Prepare a brief memo advocating which project should be chosen and why. You must select a project and recommend it based on your analysis. Do not discuss the merits of both.

Reference no: EM1330767

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