Now assume that the cost to replicate Project Y in 2 years will increase to $240,000 because of inflationary pressures. How should the analysis be handled now, and which project should be chosen?
Use the following information for problems 1 to 5. Assume that the projects are mutually exclusive. Year Cash Flow (A) Cash Flow (B) 0 ($1,525,600) ($1,425,600) 1 $683,100 $655,900 2 $480,200 $463,900 3 $745,000 $675,000 4 $308,000 $279,000 1. What is the IRR for each of these projects? Using the IRR decision rule, which project […]