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  1. business
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  3. given the following cash flows for two projects:pr

Given the following cash flows for two projects:Project E:Year 0: -$7,000,000Year 1: $2,000,000Year 2: $3,000,000Year...

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Accounting

Given the following cash flows for two projects:

  • Project E:
    • Year 0: -$7,000,000
    • Year 1: $2,000,000
    • Year 2: $3,000,000
    • Year 3: $3,500,000
    • Year 4: $4,000,000
  • Project F:
    • Year 0: -$5,000,000
    • Year 1: $1,000,000
    • Year 2: $2,000,000
    • Year 3: $2,500,000
    • Year 4: $3,500,000
Requirements:
  1. Calculate the NPV of each project at a 9% discount rate.
  2. Determine the payback period for each project.
  3. Identify the IRR for each project.
Which project should be chosen based on NPV?

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