The document presents information on two projects, Project S and Project L, including their costs, cash flows over 5 years, and expected returns calculated using NPV, IRR, MIRR, and PI at a 10% cost of capital. Based on the NPV, Project L would be selected. However, based on the IRR, Project S would be selected instead. The document asks which project should actually be selected.

1. Project S has a cost of $9,000 and is expected to produce benefits (cash flows) of $2,700 per year
for 5 years. Project L costs $26,000 and is expected to produce cash flows of $7,100 per year for
5 years. Calculate the two projects' NPVs, assuming a cost of capital of 10%. Do not round
intermediate calculations. Round your answers to the nearest cent.
Project S: $
Project L: $
Which project would be selected, assuming they are mutually exclusive?
Based on the NPV values,
Calculate the two projects' IRRs. Do not round intermediate calculations. Round your answers to
two decimal places.
Project S: %
Project L: %
Which project would be selected, assuming they are mutually exclusive?
Based on the IRR values,
-Project S
Project L
would be selected.
Calculate the two projects' MIRRs, assuming a cost of capital of 10%. Do not round intermediate
calculations. Round your answers to two decimal places.
Project S: %
Project L: %
Which project would be selected, assuming they are mutually exclusive?
Calculate the two projects' PIs, assuming a cost of capital of 10%. Do not round intermediate
calculations. Round your answers to three decimal places.
Project S:
Project L:
Which project would be selected, assuming they are mutually exclusive?
Based on the PI values,
Which project should actually be selected?