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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?

    © BrainMass Inc. brainmass.com October 9, 2019, 11:08 pm ad1c9bdddf
    https://brainmass.com/business/capital-budgeting/valuation-projects-payback-npv-irr-mirr-245759

    Solution Summary

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

    $2.19