Investment Cash Flows Assignment | Homework For You
June 9th, 2020
A firm is considering two mutually exclusive investment alternatives, both of which co st $5,000. The firm’s discount rate is 12 percent. The cash flows associated with eac h investment are:

Year Investment A Investment B
0 $2,000 $1,000
2 1,500 1,500
3 1,500 2,000
4 1,000 3,000
Which of the following is TRUE?
A ) B has a higher IRR than A.
B) A has a shorter payback period than B.
CA CICao (c A increases shareholders’ wealth.
A should be accepted because A has a hi gher NPV. VGet Finance homework help today