Calculation of NPV, IRR, Payback and Profitability Index
September 23rd, 2022
There are two mutually exclusive projects under consideration by the
Stephen Company. The following is the expected cash flows from the
projects:
Year Project A Project B
0 -30,000 -60,000
1 10,000 20,000
2 10,000 20,000
3 10,000 20,000
4 10,000 20,000
5 10,000 20,000
The cost of capital is 14%.
Please calculate the following for each project:
? NPV
IRR (Round to the nearest whole percentage)
? Profitability index
? Payback period