Cummings Products is considering two mutually exclusive investments whose expected net cash flows are as...
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Cummings Products is considering two mutually exclusive investments whose expected net cash flows are as follows:
EXPECTED NET CASH FLOWS
Year
Project A
Project B
0
-300
-405
1
-387
134
2
-193
134
3
-100
134
4
600
134
5
600
134
6
850
134
7
-180
0
Calculate the two projects NPVs, IRRs, MIRRs, PIs assuming a cost of capital of 12%. Which project would be selected, assuming they are mutually exclusive, using each ranking method? Which should actually be selected?
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