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Question 2 (25 points): Given cash flows of projects A and B with unequal life...

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Question 2 (25 points): Given cash flows of projects A and B with unequal life below, which project is a better investment on the basis of NPV and IRR analysis assuming a minimum rate of return of 12%? It is recommended that one apply incremental analysis techniques. Project A: C=-75,000 0 1=30,000 I=25,000 1=40,000 1 2 3 1=25000 4 1=30,000 5 L=$65,000 1 Year Project B: 1 I=80,000 2 C=-200,000 1=90,000 Year 0 1 C: Cost, I: Income, L: Salvage Value 1=90,000 3 -95,000 4 . L=$25,000

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