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Q1) Henn Corp, Ltd. is studying two investment projects as a part of its expansion plan for coming year. These two projects are not mutually exclusive. Cost of Project A is $12,950 where as second project (B) is expected to cost $18,625. Henn's cost of capital (required rate of return) is 11.5%. Expected annual cash flows are projected to be as follows:

Year	Project A	Project B
1	3,250.00	6,850.00
2	3,250.00	6,850.00
3	3,250.00	6,850.00
4	3,250.00	6,850.00
5	3,250.00	6,850.00

Each project will last estimated 5 years with no remaining significant scrap value. Find out IRR and NPV for each of these two projects. What must Henn Corp decide about each proposed project.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M919500

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