In: Finance
IN EXCEL< SHOW THE FORMULAS > Determine the Payback period, NPV and IRR for both project A and B (show work). Which Project would you select and why? Be specific. Project A will require an initial investment of $ 200,000 and Project B will require and initial investment of $ 325,000. The cost of capital for both projects is 12%. The cash inflows for the next 5 years are listed below:
Project A Project B
0 ($200,000) ($325,000)
1 $50,000 $75,000
2 $80,000 (-$50,000)
3 $110,000 $160,000
4 $45,000 $100,000
5 $40,000 $190,000