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Question

Farrah Corporation is considering two projects (see below). For your analysis, assume these projects are mutually

exclusive with a required rate of return of 12%.


Project 1

Project 2

Initial investment

$185,000

$1,100,000

Cash inflow Year 1

$230,000

$1,450,000

Compute the following for each project:


·       NPV (net present value)

·       PI (profitability index)

·       IRR (internal rate of return)

Top Answer

Project 1. NPV is $20357.14 PI is 1.1100... View the full answer

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