Explore BrainMass
Share

My small business is considering two mutually exclusive projects, X and Y. Make a recommendation based on Payback method, Discounted payback method, NPV method, IRR, MIRR, PI

This content was STOLEN from BrainMass.com - View the original, and get the solution, here!

My small business is considering two mutually exclusive projects, X and Y, whose costs and cash flows are shown below:

Year Project X Cash Flow Project Y Cash Flow
0 -$2,000 -$2,000
1 200 2,000
2 600 200
3 800 100
4 1,400 75

The projects are equally risky, and my small business cost of capital is 12 percent. We must make a recommendation, and must base it on the following calculations.

a. Payback method
b. Discounted payback method
c. NPV method
d. IRR
e. MIRR
f. PI

© BrainMass Inc. brainmass.com September 23, 2018, 3:30 am ad1c9bdddf - https://brainmass.com/business/capital-budgeting/59264

Solution Summary

You will find the answer to this puzzling question inside...

$2.19