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# Caledonia: Mutually Exclusive Projects

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Please help with Part F.

Caledonia is considering two additional mutually exclusive projects. The cash flows associated
with these projects are as follows:
YEAR PROJECT A PROJECT B
0 -\$100,000 -\$100,000
1 32,000 0
2 32,000 0
3 32,000 0
4 32,000 0
5 32,000 \$200,000

The required rate of return on these projects is 11 percent.
a. What is each project's payback period?
b. What is each project's net present value?
c. What is each project's internal rate of return?
d. What has caused the ranking conflict?
e. Which project should be accepted? Why?
f. The factors Caledonia would have to consider if they were doing a lease versus a buy.

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https://brainmass.com/business/net-present-value/caledonia-mutually-exclusive-projects-270546

#### Solution Summary

This solution show step-by-step calculations in an Excel file to determine the payback period, NPV, IRR, ranking conflict and the factors Caledonia would have to consider if they were doing a lease versus a buy.

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