Calculate Stocks and Capital Budgets
Can you help me get started with this assignment?
Two mutually exclusive investment projects have the following forecasted cash flow:
Year A B
0 $-20,000 $-20,000
1 10,000 0
2 10,000 0
3 10,000 0
4 10,000 60,000
a) Compute the internal rate of return for each project.
b) Compute the net present value for each project if the firm has a 10 percent cost of capital.
c) Which project should be adopted? Why?