Answer to Question #237891 in Finance for Aiko

Question #237891
opq inc. considers investment in three mutually-exclusive projects. project a costs $120,000 in year 0 and generates the free cash flow of $40 thousand per annum during the first three years, and $30 thousand in years 4 and 5. project b also costs $120,000 in year 0 and generates the free cash flow of $30 thousand in years 1 and 2, and $40 thousand in years 3 through 5. project c costs $200,000 in year 0 and generates the free cash flow of $50 thousand in years 1 and 2, and $80 thousand in years 3 through 5. opq inc. considers applying the 14% cost of capital as a discount rate for projects a and b. project c is riskier than projects a and b. therefore, opq inc. management believes that they should apply the 17% cost of capital as a discount rate for project c. what is the npv and the irr of each project? which project should opq inc. choose based on the npv numbers? which project should opq inc. choose based on the irr figures?
1
Expert's answer
2021-09-16T11:31:21-0400
Dear Aiko, your question requires a lot of work, which neither of our experts is ready to perform for free. We advise you to convert it to a fully qualified order and we will try to help you. Please click the link below to proceed: Submit order

Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

No comments. Be the first!

Leave a comment

Ask Your question

LATEST TUTORIALS
New on Blog
APPROVED BY CLIENTS