NPV = Present value of cash inflows - present value of cash outflows | ||
Project A | 42271*PVAF(8%, 3 years) - 107000 | 1936.467287 |
Project B | 15139*PVAF(8%, 3 years) - 34000 | 5014.671483 |
Project B since NPV is higher |
IRR is the rate at which NPV = 0 | IRR | ||
PVAF | Project A | 2.531286225 | 9% |
Project B | 2.245855076 | 16% | |
Project B should be selected |
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