This paper circulates around the core theme of Two mutually exclusive investments cost $10,000 each and havethe following cash inflows. The firm’s cost of capital is 10%.What is the net present value of each investment?What is the internal rate of return of each investment? Which investment(s) shoul together with its essential aspects. It has been reviewed and purchased by the majority of students thus, this paper is rated 4.8 out of 5 points by the students. In addition to this, the price of this paper commences from £ 99. To get this paper written from the scratch, order this assignment now. 100% confidential, 100% plagiarism-free.
1.
Two mutually exclusive investments cost $10,000 each
and havethe following cash inflows. The firm’s cost of capital is 10%.
A.
What is the net present value of each investment?
B.
What is the internal rate of return of each
investment?
C.
Which investment(s) should the firm make?
D.
Would your answers be different to C if the funds
received in Year 2 for investment A could be reinvested at 16%?
