Consider the following cash flows of two mutually exclusive projects for Dubai Company. Assume the discount rate for Dubai Company is 10 percent. Required: Based on the payback period, which project...

Consider the following cash flows of two mutually exclusive projects for Dubai Company. Assume the discount rate for Dubai Company is 10 percent.

Required:

1. Based on the payback period, which project should be taken?


2. Based on the NPV, which project should be taken?


3. Based on the IRR, which project should be taken?


4. Based on this analysis, is incremental IRR analysis necessary? If yes, conduct the analysis.

Extracted text: Project M -$1,400,000 900,000 800,000 700,000 Project N -$600,000 300,000 500,000 400,000 Year 1 2 3