Dorati Inc. is considering two mutually exclusive projects. Dorati used a 15% required rate of return to evaluate capital expenditure projects. A) Assuming the two projects have the costs and cash flows shown below, determine
Question 2- UNIT 2: CAPITAL BUDGETTING PROCESS
UNIT 3: CASH FLOW ESTIMATION
- Dorati Inc. is considering two mutually exclusive projects. Dorati used a 15% required
rate of return to
evaluate capital expenditure projects.
A) Assuming the two projects have the costs and
Year Project S Project T
0 –$70,000 –$100,000
1 $50,000 $ 60,000
2 $60,000 $ 70,000
3 $ 80,000
4 $ 90,000
B) Assume in two years Project S will still cost $70,000 and produce the same two years of cash flows.
Find the
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