Your firm uses the IRR method and asks you to evaluate the following mutually exclusive projects: Year

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Your firm uses the IRR method and asks you to evaluate the following mutually exclusive projects:

Year Cash flows (£) 0 1 2 3 4 Proposal L Proposal M

-47,232

-47,232 20,000 0

20,000 10,000 20,000 20,000 20,000 65,350 Using the appropriate IRR method, evaluate these proposals assuming a required rate of return of 10 per cent.

Compare your answer with the net present value method.

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