Higher Ground Company is presented with the subsequent two mutually exclusive projects. The required return for both projects is 15 %.
Year Project M Project N
0 $1 45,000 $350,000
1 63,000 1 55,000
2 81 ,000 1 75,000
3 72,000 1 40,000
4 58,000 1 05,000
a. Find what is the IRR for each project?
b. Evaluate what is the NPV for each project?
c. Which, if either, of projects should company accept?