Capital Budgeting
- Based on the cash flows shown in the chart below, compute the NPV for Project Huron. Suppose that the appropriate cost of capital is 12 percent. Advise the organization about whether it should accept or reject the project.
- Based on the cash flows shown in the chart below, compute the IRR and MIRR for Project Erie. Suppose that the appropriate cost of capital is 12 percent. Advise the organization about whether it should accept or reject the project.
| Time | 0 | 1 | 2 | 3 | 4 |
|---|---|---|---|---|---|
| Cash Flow | $12,000 | $2,360 | $4,390 | $1,520 | $3,300 |
| Time | 0 | 1 | 2 | 3 | 4 | 5 |
|---|---|---|---|---|---|---|
| Cash Flow | $12,000 | $2,360 | $4,390 | $1,520 | $980 | $1,250 |
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