Question 2 (30 Marks)
In this question, Project A and Project B are mutually exclusive. For both projects, the
cost of capital is 10 percent. Based on their cash flows as shown in the table below,
answer the questions that follow.
Project A -100
Project B -400
1. Calculate the NPV of Project A. (5 Marks)
2. Calculate the NPV of Project B (5 Marks)
3. Calculate the IRR of Project A (7 Marks)
4. Calculate the IRR of Project B (7 Marks)
5. Which of the two projects would you advise a company to invest in? Why? (6
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