Range of discount rates might the company choose project

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NPV versus IRR

Parkallen Inc. has identified the following two mutually exclusive projects:

Year Cash Flow (A) Cash Flow (B)

0 -$29,000 -$29,000

1 14,400 4,300

2 12,300 9,800

3 9,200 15,200

4 5,100 16,800

What is the IRR for these projects? What might the NPV for each of these projects be if the required return is 11%. Based on range of discount rates might the company choose project a or b?

Reference no: EM132007251

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