You are analyzing two mutually exclusive projects with the cash flows shown below. Thecash flows are in millions. Both projects are equally risky. Your costs of capital are 10%.Project 1-$180Project 2-$100$20$20$20$20$20$20$20$20$20-$10Year$50$45$40$35$30$25$20$15$10$51234578910a. Compute the NPVS of the two projects.b. Compute the IRRS of the two projects.c. Compute the simple payback periods of the two projects.d. Which project should you do? Briefly explain why.

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You are analyzing two mutually exclusive projects with the cash flows shown below. The cash flows are in millions. Both projects are equally risky. Your costs of capital are 10%. Project 1 -$180 Project 2 -$100 Year $50 $45 $40 $35 $30 $25 $20 $20 $20 $20 1 2 3 $20 $20 $20 $20 $20 $20 4 5 7 8 $15 $10 10 $5 -$10 a. Compute the NPVS of the two projects. b. Compute the IRRS of the two projects.

You are analyzing two mutually exclusive projects with the cash flows shown below. The cash flows are in millions. Both projects are equally risky. Your costs of capital are 10%. Project 1 -$180 Project 2 -$100 Year $50 $45 $40 $35 $30 $25 $20 $20 $20 $20 1 2 3 $20 $20 $20 $20 $20 $20 4 5 7 8 $15 $10 10 $5 -$10 a. Compute the NPVS of the two projects. b. Compute the IRRS of the two projects.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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