Connor Corporation is considering two projects (see below). For your analysis, assume these projects are mutually exclusive with a required rate of return of 12%.   project 1 project 2 initial investment $(510,000) $(685,000) cash flow year 1 485,000 610,000 Compute the following for each project:   NPV (net present value) PI (profitability index) IRR (internal rate of return)   Based on your analysis, answer the following questions :   Which is the best choice? Why? Which project should be selected and why? If the projects had the same IRR amounts but different NPV totals, then how would you know which project to select? Explain.

There are two projects under consideration by the Rainbow factory. Each of the projects will require an initial investment of $34,927 and is expected to generate the following cash flows:   First Year Second Year Third Year Total Alpha Project $32,500   $22,500     $4,500   $59,500 Beta Project 7,000   23,500     27,904   58,404 A. Calculate the internal rate of return on both projects. Use the IRR spreadsheet function to calculate internal rate of return. Alpha Project fill in the blank % Beta Project fill in the blank % B. Make a recommendation on which one to accept.

A firm is evaluating a project with the following cash flows. At a required return of 11 percent, what is the project's NPV? What if the required return is 24 percent? Input area: Required Return Required Return Year 0 Year 1 Year 2 Year 3 Output area: es es es es NPV at 11% NPV at 24% Մ $ $ 11% 24% (Use cells A6 to B11 from the given information to complete this question. You must use the built Excel function to answer this question.) (41,000) 20,000 23,000 14,000

Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown below. The required rate of return on projects of both of their risk class is 8 percent, and that the maximum allowable payback and discounted payback statistic for the projects are 2 and 3 years, respectively. Time Project A Cash Flow Project B Cash Flow Use the payback decision rule to evaluate these projects, which one(s) should it be accepted or rejected? Multiple Choice 0 -35,000 -45,000 1 25,000 25,000 2 45,000 5,000 3 16,000 65,000