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Project L involves adding a new ignition system product and has increasing cash flows over 3 years. Project S involves an existing product line add-on and has decreasing cash flows over 3 years. Both have initial costs of $100,000 and different cash flows each year. The CFO assessed both projects as having average risk for the firm. The NPV of Project L is $18,780 and of Project S is $19,980. The IRR of Project L is 18.13% and of Project S is 23.56%. According to NPV and IRR, Project S should be accepted if
- Author
- suleman yousafzai
- Language
- EN