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.140 Sparkle Co, has an opportunity to invest in two business initiatives: M1 and 22. Expected cash flow data for these two p

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Statement showing computation:
1) Calculation of NPV:
Statement showing Cash flows M1 Z2
Particulars Time PVf 10% Amount PV Amount PV
Cash Outflows                                    -                                                          1.00                                         (140.00)                 (140.00)                 (140.00)                 (140.00)
PV of Cash outflows = PVCO                 (140.00)                 (140.00)
Cash inflows                               1.00                                                    0.9091                                              60.00                      54.55                      75.00                      68.18
Cash inflows                               2.00                                                    0.8264                                              60.00                      49.59                      75.00                      61.98
Cash inflows                               3.00                                                    0.7513                                              60.00                      45.08                      75.00                      56.35
Cash inflows                               4.00                                                    0.6830                                              60.00                      40.98                             -  
PV of Cash Inflows =PVCI                    190.19                    186.51
NPV= PVCI - PVCO                      50.19                      46.51
NPV of M1 is $50.19
NPV of Z2 is 46.51
If both projects can be undertaken then both projects should be acceptd because NPV of both the project is greater than zero.
If both projects are independent of each other then both projects should be acceptd because NPV of both the project is greater than zero.
If both projects are mutually exclusive then project M1 should be accepted because its NPV is more than that of Project Z2.
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