Company B is deciding which between the 2 projects should it invest in (supported by the cash flow patterns shown below). The company's cost of capital is approximately 9% but due to the current...


Company B is deciding which between the 2 projects should it invest in (supported by the cash flow patterns shown below). The company's cost of capital is approximately 9% but due to the current economic environment, its cost of equity may increase and may be a bit more than the approximated value.








































YearProject 1Project 2
0 (initial outlay)-13 million-12 million
13 million8 million
23 million6 million
35 million1 million
45 million1 million
55 million1 million


1. calculate the NPV and IRR of both projects


2. which project should the company invest in? would you choose to follow the npv or irr route? explain your answer



Jun 04, 2022
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