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Project ABC

This document compares two projects, Project A and Project B, based on their cash flows, present values, internal rates of return (IRR), and net present values (NPV) using discount rates of 9% and 14%. At a 9% discount rate, Project B has a higher NPV than Project A and would be recommended. However, at a 14% discount rate, both Project A and B have negative NPVs, so neither project would be recommended at this rate.

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lorrynorry
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© Attribution Non-Commercial (BY-NC)
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Download as XLS, PDF, TXT or read online on Scribd
121 views

Project ABC

This document compares two projects, Project A and Project B, based on their cash flows, present values, internal rates of return (IRR), and net present values (NPV) using discount rates of 9% and 14%. At a 9% discount rate, Project B has a higher NPV than Project A and would be recommended. However, at a 14% discount rate, both Project A and B have negative NPVs, so neither project would be recommended at this rate.

Uploaded by

lorrynorry
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as XLS, PDF, TXT or read online on Scribd
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Sheet1

Cash Flow
Present Value
Project A
Project B
NPV Factor @ 9%
Project A
Project B
-50000
-50000
1
-50000
-50000
10000
0
0.917431193
9174.311927
0
25000
22000
0.841679993
21041.99983 18516.9599
30000
48000
0.77218348
23165.5044
37064.807
IRR
12.21%
13.42%
NPV
3381.81616 5581.76689

I would recommend Project B because the NPV is higher than Pro


Cash Flow
Present Value
Project A
Project B
NPV Factor @ 14%
Project A
Project B
-50000
-50000
1
-50000
-50000
10000
0
0.877192982
8771.929825
0
25000
22000
0.769467528
19236.68821 16928.2856
30000
48000
0.674971516
20249.14549 32398.6328
IRR
12.21%
13.42%
NPV -1742.236478 -673.081596

Yes. I would not recommend either Project A or B at this rate bec

Page 1

Sheet1

e NPV is higher than Project A.

ct A or B at this rate because the NPVs are both negative.

Page 2

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