A company is evaluating two projects:Project EInitial Investment: $1,200,000Year 1: $300,000Year 2: $400,000Year 3: $500,000Year...
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Accounting
A company is evaluating two projects:
Project E
- Initial Investment: $1,200,000
- Year 1: $300,000
- Year 2: $400,000
- Year 3: $500,000
- Year 4: $600,000
Project F
- Initial Investment: $1,500,000
- Year 1: $350,000
- Year 2: $450,000
- Year 3: $550,000
- Year 4: $650,000
a. Calculate the payback period for each project. b. Determine the NPV at a 6% discount rate. c. Compute the IRR for both projects. d. Based on these calculations, which project should the company invest in? Provide your reasoning.
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