Problem:
Better Health Inc. is evaluating two capital investments, each of which requires an up-front (Year 0) expenditure of $1.5 million. The projects are expected to produce the following net cash inflows:
- Year Project A Project B
- 1 $ 500,000 $ 2,000,000
- 2 1,000,000 1,000,000
- 3 2,000,000 600,000
Required:
Question 1: What is each project IRR?
Question 2: What is each project's NPV if the opportunity cost of capital is 10%?
Note: Could someone please give me a step by step solution?