Capital Budgeting Problem
Problem
Calculate the PP, NPV, and IRR of the following projects assuming a 14% Discount Rate.
Cash Flow | Project A | Project B | Project C | Project D |
Year 0 | -$1,000,000 | -$1,000,000 | -$500,000 | -$500,000 |
Year 1 | $400,000 | $150,000 | $200,000 | $75,000 |
Year 2 | $400,000 | $100,000 | $250,000 | $50,000 |
Year 3 | $225,000 | $550,000 | $150,000 | $225,000 |
Year 4 | $200,000 | $775,000 | $100,000 | $387,500 |
Which project(s) should we accept if they are independent? Mutually Exclusive?