2 Annies Land Company has identified the following two mut.pdf
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Annie's Land Company is evaluating two mutually exclusive projects, A and B, with initial cash flows of -$500, followed by varying positive cash flows over four years. The document requests the calculation of the Internal Rate of Return (IRR) and Net Present Value (NPV) using Excel, and guidance on which project to accept if the cost of capital is 10%. The decision will depend on the comparison of the NPV and IRR results for both projects.
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2 Annies Land Company has identified the following two mut.pdf
- 1. 2. Annie's Land Company has identified the following two mutually exclusive projects, A and B: (Figures below are in thousands) Year zero 1 2 3 4 Cash Flow(A) -$500 180 170 150 134 Cash Flows(B) -$500 155 155 155 155 a) Using Excel find the value of IRR AND NPV b) If Annie's Land Co. has a cost of capital of 10%, which project should the company accept? Why