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Valuation of Projects: Payback, NPV, IRR & MIRR

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Chrome Corp. estimates its cost of capital at 11 percent. The company is considering two mutually exclusive projects whose after-tax cash flows are as follows:

Project S:
Year Cash Flow
0 -3000
1 500
2 2500
3 1500
4 1500

Project L:
Year Cash Flow
0 -9000
1 1000
2 5000
3 5000
4 5000

What is the payback, Net Present Value, Internal Rate of Return, and Modified Internal Rate of Return of each project?

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Solution Summary

Calculates the payback, Net Present Value, Internal Rate of Return, and Modified Internal Rate of Return of each of two projects.

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