We have two mutually exclusive investments with the following cash flows:                                                                                                   Year Investment A Investment B 0 –$100 –$100 1 10 50 2 30 40 3 50 30 4 70 20                                                                          e. If the required return on this project is 10%, would both NPV and IRR give us the same conclusion? Explain your answer.

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A: NPV and IRR help to check the viability of the projects. NPV will tell decision in absolute terms…

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A: The correct answer is  b. It will decrease

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Q: We have two mutually exclusive investments with the following cash flows:…

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A: NPV= Cash flow in Year 1 / (1+Interest rate) + Cash flow in year 0

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Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.