If the projects are mutually exclusive which one(s) should be accepted?

Its time to decide how to use the money your f Show more Show All Work Please Question 2: (Capital Budgeting) Its time to decide how to use the money your firm is expected to make this year. Two investment opportunities are available with net cash flows as follows: Year Project X Project Y 0 (Now) ($30000) ($30000) 1 12000 4800 2 10000 7800 3 8000 10800 4 6000 13800 a. Calculate each projects Net Present Value (NPV) assuming your firms weighted average cost of capital (WACC) is 5% b. Calculate each projects Internal rate of Return (IRR). c. Plot NPV profiles for both projects on a graph. d. Assuming that your firms WACC is 5%: (1) If the projects are independent which one(s) should be accepted? (2) If the projects are mutually exclusive which one(s) should be accepted? Show less

Posted in Uncategorized