?(?Time-disparity problem?) The State Spartan Corporation is considering two mutually exclusive projects. The free cash flows associated...

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Finance

?(?Time-disparity problem?) The State Spartan Corporation isconsidering two mutually exclusive projects. The free cash flowsassociated with these projects are shown in the popup? window:LOADING.... The required rate of return on these projects is 10percent.

a. What is each? project's payback? period?

b. What is each ?project's NPV??

c. What is each? project's IRR??

d. What has caused the ranking? conflict?

e. Which project should be? accepted? Why?

PROJECT A

PROJECT B

Initial outlay

-$50,000

-$50,000

Inflow year 1

???? 15,625

?????????????0

Inflow year 2

????? 15,625

?????????????0

Inflow year 3

????? 15,625

?????????????0

Inflow year 4

????? 15,625

?????????????0

Inflow year 5

????? 15,625

???? 100,000

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Transcribed Image Text

?(?Time-disparity problem?) The State Spartan Corporation isconsidering two mutually exclusive projects. The free cash flowsassociated with these projects are shown in the popup? window:LOADING.... The required rate of return on these projects is 10percent.a. What is each? project's payback? period?b. What is each ?project's NPV??c. What is each? project's IRR??d. What has caused the ranking? conflict?e. Which project should be? accepted? Why?PROJECT APROJECT BInitial outlay-$50,000-$50,000Inflow year 1???? 15,625?????????????0Inflow year 2????? 15,625?????????????0Inflow year 3????? 15,625?????????????0Inflow year 4????? 15,625?????????????0Inflow year 5????? 15,625???? 100,000

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