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Finance:net present value,irr and depreciation.

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1. You are considering the following two mutually exclusive projects that will not be repeated. The required rate of return is 11.25% for project A and 10.75% for project B. Which project should you accept and why?

project A; because its NPV is about $335 more than the NPV of project B
project A; because it has the higher required rate of return
project B; because it has the largest total cash inflow
project B; because it returns all its cash flows within two years
project B; because it is the largest sized project

2. What is the internal rate of return on an investment with the following cash flows?


3. LiCheng's Enterprises just purchased some fixed assets that are classified as 3-year property for MACRS. The assets cost $1,900. What is the amount of the depreciation expense for year 2?


Solution Summary

The problem set decks with problems in finance:net present value,internal rate of return,depreciation etc.