Nautilus Company is going to make an investment of $700,000 in a machine and the following are the cash flows that two different products would bring in years one through four. The company's required rate of return is 12%. Option A Option B $245,000 $225,000 $195,000 $275,000 $295,000 $250,000 $245,000 $225,000 Using the appropriate EXCEL spreadsheet in the Chapter11 NPV IRR Analysis.xlsx download, answer the following questions: What is the NPV for Option A? What is the NPV for Option B? What is the IRR for Option A?
Nautilus Company is going to make an investment of $700,000 in a machine and the following are the cash flows that two different products would bring in years one through four. The company's required
| Option A | Option B |
| $245,000 |
$225,000 |
|
$195,000 |
$275,000 |
|
$295,000 |
$250,000 |
|
$245,000 |
$225,000 |
Using the appropriate EXCEL spreadsheet in the Chapter11
- What is the NPV for Option A?
- What is the NPV for Option B?
- What is the IRR for Option A?
- What is the IRR for Option B?
PLEASE NOTE #1: The dollar amounts will be with "$" and commas as needed and rounded to two decimal places (i.e. $12,345.67). Round your IRR answers, in percentage format, to two decimal places (i.e. 12.34%).
5. Given the above answers, which project should the company invest in? Project .
PLEASE NOTE #2: Your answer is either "A" or "B" - capital letter, no quotes.
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