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What would happen if both projects had negative npv totals

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Reference no: EM133041822

Question - Connor Corporation is considering two projects (see below). For your analysis, assume these projects are mutually exclusive with a required rate of return of 12%.

 

Project 1

Project 2

Initial investment

$(684,000)

$(585,000)

Cash inflow Year 1

$275,000

$380,000

Based on your analysis, answer the following questions:

Which is the best choice? Why?

Which project should be selected and why? If the projects had the same IRR amounts but different NPV totals, then how would you know which project to select? Explain.

What would happen if both projects had negative NPV totals? Which project would you choose? What do negative NPVs indicate? Explain.

Should we also use the payback method to assist us in project selection? Why or why not? Explain.

Reference no: EM133041822

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