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Axis Corp. is considering investment in the best of two mutually exclusive projects. Project Kelvin involves an overhaul of the existing system; it will cost $45,000 and generate cash inflows of $20,000 per year for the next 3 years.

Project Thompson involves replacement of the existing system; it will cost $275,000 and generate cash inflows of $60,000 per year for 6 years.

Using an 8% cost of capital, calculate each project's NPV, and make a recommendation based on your findings.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92095205

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