Caledonia is considering two additional mutually exclusive, Ask an Expert

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Caledonia is considering two additional mutually exclusive projects. The cash flows associated with these projects are as follows:

_________________________________________________________________________________

YEAR PROJECT A PROJECT B

0 - $100,000 -$100,000

1 32,000 0

2 32,000 0

3 32,000 0

4 32,000 0

5 32,000 $200,000

______________________________________________________________________________

The required rate of return on these projects is 11 percent.

a. What is each project's payback period?

b. What is each project's net present value?

c. What is each project's internal rate of return?

d. What has caused the ranking conflict?

e. Which project should be accepted? Why?

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M9880740

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