Given the following cash +pws for project X and project Y, Year Project X Project Y -62000 -105000 1 27000 10000 2 13500 18000 11000 22000 4 10000 25000 9000 32000 7500 40000 a. Calculate the NPV, IRR, and traditional payback period for each project, assuming a required rate of return of 8 percent. b. If the projects are independent, which project(s) should be selected? If they are mutually exclusive, which project should be selected?

Given the following cash +pws for project X and project Y, Year Project X Project Y -62000 -105000 1 27000 10000 2 13500 18000 11000 22000 4 10000 25000 9000 32000 7500 40000 a. Calculate the NPV, IRR, and traditional payback period for each project, assuming a required rate of return of 8 percent. b. If the projects are independent, which project(s) should be selected? If they are mutually exclusive, which project should be selected?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter12: Capital Budgeting: Decision Criteria

Section: Chapter Questions

Problem 13P

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