# IRR NPV of two projects

Comparing two projects

Project A

cost of capital of 12%

life of project is 20 years

annual cash flow 350,000

initial cost 1,250,000

salvage value 250,000

project b

cost of capital of 12%

life of project is 20 years

annual cash flow 400,000

initial cost 1,400,000

salvage value 110,000

What is the payback period?

what is the npv of the the two projects?

what is the IRR of both projects?

What is the profitability index?

which of the two projects should be choosen and which criteria should be used to aid the decision?

https://brainmass.com/business/capital-budgeting/irr-npv-of-two-projects-241330

#### Solution Preview

Comparing two projects

Project A

cost of capital of 12%

life of project is 20 years

annual cash flow 350,000

initial cost 1,250,000

salvage value 250,000

Project B

cost of capital of 12% ...

#### Solution Summary

This solution is comprised of a detailed explanation to answer what is the payback period.