Explore BrainMass
Share

Explore BrainMass

    Consider the following project cash flows: compute NPV vs. IRR

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

    Consider the following project cash flows

    Year Project A Project B
    0 investment -$200 -$300
    1 60 200
    2 70 100
    3 80 100
    4 80

    1. Calculate the NPV of each project. Which project should be chosen if opportunity cost is 11%?
    2. IRR. What are the internal rates of return on projects A and B?

    Please show all computations.

    © BrainMass Inc. brainmass.com October 9, 2019, 5:27 pm ad1c9bdddf
    https://brainmass.com/business/capital-budgeting/consider-the-following-project-cash-flows-compute-npv-vs-irr-57479

    Solution Preview

    Please find calculations in the attached excel sheet.

    1) Project B should be ...

    Solution Summary

    The solution shows the formula and calculates the answer with further narrative explanation.

    $2.19