IRR AND NPV A company is analyzing two mutually exclusive projects, S and L, with the following cash flows:

0 2

$10

$800

$250

$250

$900

$0 2$1,000 2$1,000 Project S Project L 3 4

$10

$400 1

The company’s WACC is 10%. What is the IRR of the better project? (Hint: The better project may or may not be the one with the higher IRR.)

AppendixlLO1