Finance Assignment | Professional Writing
Smith Technologies has a WACC of 14%, and is currently evaluating two projects for this year’s capital budget. Project A has a cost of $6000 and its expected cash inflows are $2000 for 5 years. Project B has a cost of $18000 and its expected cash inflows are $5600 for 5 years.
a. Calculate NPV, IRR, payback for each project.
b. Assuming the projects are independent which one(s) would you recommend for each method? Why?
c. If the projects are mutually exclusive, which would you recommend for each method? Why?
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