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# ABC Widgets

Fred Jones, the financial manager of ABC Widgets is considering two different projects to undertake. Project A is not very risky, so Jones decides to discount its future cash flows at 12 percent. Project B is very risky, so Jones decides to discounts its cash flows at 14 percent. The NPV for project A is: ____________. The IRR for project A is: ___________. The NPV for project B is:________. The IRR for project B is: _____

Project A Project B Year 0 -\$20,000 -\$30,000
Year 1 \$11,000 \$11,000
Year 2 \$10,000 \$10,000
Year 3 \$12,000 \$15,000
Year 4 \$11,000 \$17,000

#### Solution Preview

Fred Jones, the financial manager of ABC Widgets is considering two different projects to undertake. Project A is not very risky, so Jones decides to discount its future cash flows at 12 percent. Project B is very risky, so Jones decides to discounts its cash flows at 14 percent. The NPV for project A is: ____________. The IRR for project A is: ___________. The NPV for project B is:________. The IRR for project B is: _____

Project A Project B
Year 0 -\$20,000 -\$30,000
Year 1 \$11,000 \$11,000
Year 2 \$10,000 ...

#### Solution Summary

This solution is comprised of a detailed explanation to find NPV and IRR for two projects.

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