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Seinfeld Systems has a 13% WACC and is evaluating two projects for this years capital...

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Finance

Seinfeld Systems has a 13% WACC and is evaluating two projects for this years capital budget. After-tax cash flows, including depreciation, are as follows:

Project A

Project B

Year

Cash Flow

Cash Flow

0

-$6,000

-$13,500

1

$2,200

$5,000

2

$2,200

$5,200

3

$2,400

$5,200

4

$2,400

$5,200

5

$2,400

$5,200

Calculate the NPV and IRR for both projects.

If the projects are mutually exclusive, which would you recommend?

Group of answer choices

Project A: NPV = $2,107.73, IRR = 26.32%, Project B: NPV = $4,612.61, IRR = 26.16%. Accept project A

Project A: NPV = $1,037.77, IRR = 18.44%, Project B: NPV = $2,023.88, IRR = 18.50%. Accept both

Project A: NPV = $2,107.73, IRR = 26.32%, Project B: NPV = $4,612.61, IRR = 26.16%. Accept project B

Project A: NPV = $2,107.73, IRR = 26.32%, Project B: NPV = $4,612.61, IRR = 26.16%. Accept Both

Project A: NPV = $1,037.77, IRR = 18.44%, Project B: NPV = $2,023.88, IRR = 18.50%. Accept project B

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