In: Finance
DISCUSS QUESTION #3 (Refer to Handouts for Chapter 11 posted in Content)
The following TWO projects are being considered in this year's capital budget.
PROJECT 1: Assume the Cost of Capital is 10% for this project
cash flows | ||
year | project | |
0 | -34,000 | |
1 | 17,000 | |
2 | 15,000 | |
3 | 13,000 |
PROJECT 2: This project has a life of 3 years. The initial investment is $15,000 with annual cash inflows of $7,000. Assume the Cost of Capital is 9% for this project.
REPLY POST: Question 3
1) Calculate the NPV for Project 1
2) Calculate the IRR and MIRR for Project 2
3) Based on your calculations, should these projects be accepted or rejected?