Chestnut Tree Farms has identified the following two mutually exclusive projects. The company uses a discount...

Chestnut Tree Farms has identified the following two mutually exclusive projects. The company uses a discount rate of 6%.

Year	Cash Flow (A)		Cash Flow (B)
0	−$	40,000	−$	40,000
1		11,300		17,400
2		14,800		14,100
3		13,700		12,900
4		7,900		2,200

What is the IRR of each project? Based on the IRR criterion, which project(s) would you choose?

What is the NPV of each project? Based on the NPV method which project(s) would you choose?

What is your final choice of project?

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Expert Solution

jeff jeffy answered 1 year ago

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