You have to evaluate two mutually exclusive projects Alpha and Beta. Both projects have a cost fo capital is 12%. Both projects have an economic life of 5 years.
Project Alpha has a cost of $14,000. Its expected cash flows are an annuity of $4,500 per annum.
Project Beta has a cost of $14,000. It has one expected cash flow at the end of period 5 $30,000.
We must figure out the NPR, IRR and CHOICE for both Alpha and Beta.
Complete the following table:
Project: NPR IRR CHOICE
Alpha-
Beta-