You are considering two independent projects a a project b

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You are considering two independent projects A a project B. The intitial cash outlay associated with project A is $50,000 and the initial cash outlay associated with project B is $70,000. The required rate of return on both projects is 12 percent. The expected annual free cash flows from each project are as follows:

Year Project A Project B
0 ($50,000) ($70,000)
1 12,000 13,000
2 12,000 13,000
3 12,000 13,000
4 12,000 13,000
5 12,000 13,000
6 12,000 13,000

Calculate the NPV, PI, and IRR for each project and indicate if the project should be accepted.

Reference no: EM13595480

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