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problem: A firm with a 14% WACC is estimating two projects for this year's capital budget. After tax cash flows, including depreciation, are as follows

 

0

1

2

3

4

5

Project A

-$6,000

$2,000

$2,000

$2,000

$2,000

$2,000

Project B

-$18,000

$5,600

$5,600

$5,600

$5,600

$5,600

[A] Compute NPV, IRR, MIRR, payback, & discounted payback for each project.
[B] Suppose the projects are independent, which one or ones would you recommend?
[C] If the projects are mutually exclusive, determine which would you recommend?

 

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M918621

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