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Compute the npv and irr for the two projects

Problem: Company K is considering two mutually exclusive projects. The cash flows of the projects are as follows:

Year Project A Project B
0 -$2,000 -$2,000
1 $500
2 $500
3 $500
4 $500
5 $500
6 $500
7 $500 $5,650

Q1. Compute the NPV and IRR for the above two projects, assuming a 13% required rate of return.

Q2. Discuss the ranking conflict.

Q3. Which of these two projects should be chosen?

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Finance Basics: Compute the npv and irr for the two projects

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Finance Basics: Compute the npv and irr for the two projects

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