Problem: Green Grocers is deciding among two mutually exclusive projects. The two projects have the following cash flows:
Year Project A Cash Flow Project B Cash Flow
0 -$50,000 -$30,000
1 10,000 6,000
2 15,000 12,000
3 40,000 18,000
4 20,000 12,000
The company's weighted average cost of capital is 10 percent (WACC = 10%). What is the net present value (NPV) of the project with the highest internal rate of return (IRR)?
$ 7,090
$ 8,360
$11,450
$12,510
$15,200