Tesar Chemicals is considering Projects S and L, whose cash flows are shown below. These...
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Tesar Chemicals is considering Projects S and L, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and not repeatable.
WACC: 7%
Year 0 1 2 3 4
CFS -$100 $50 $40 $30 $10
CFL -$200 $30 $50 $60 $100
a.Find NPV, IRR and discounted payback period for Project S.
b.Find NPV, IRR and discounted payback period for Project L.
c.If Projects S and L are mutually exclusive, which project should be selected? Explain why you choose the project.
d.If Projects S and L are independent, which project should be selected? Explain why you choose the project.
e.Find crossover rate.
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