Explore BrainMass
Share

Explore BrainMass

    Calculating NPV and IRR of Mutually Exclusive Projects

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    If a company is evaluating two mutually exclusive projects. Their cost of capital is 15 percent. Costs and cash flows are given in the following table. Which project should be accepted? Calculate NPV and IRR to formulate your decision.

    Year Project 1 Project 2
    0 ($1,250,000) ($1,250,000)
    1 $250,000 $350,000
    2 $350,000 $350,000
    3 $450,000 $350,000
    4 $500,000 $350,000
    5 $750,000 $350,000

    © BrainMass Inc. brainmass.com October 10, 2019, 6:53 am ad1c9bdddf
    https://brainmass.com/economics/estimation-and-forecasting/calculating-npv-irr-mutually-exclusive-projects-560276

    Solution Summary

    The solution calculates the NPV and IRR parameters of two mutually exclusive projects.

    $2.19