Question
10. IRR AND NPV A company is analyzing two mutually exclusive projects, S and L, with the following cash flows: 0 1 2 3 4
10.
IRR AND NPV
A company is analyzing two mutually exclusive projects, S and L, with the following cash flows:
| 0 | 1 | 2 | 3 | 4 |
| Project S | -$1,000 | $892.32 | $250 | $15 | $5 |
| Project L | -$1,000 | $0 | $240 | $400 | $852.82 |
The company's WACC is 10.5%. What is the IRR of the better project? (Hint: The better project may or may not be the one with the higher IRR.) Round your answer to two decimal places.
%
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Principles Of Finance
Authors: Scott Besley, Eugene F. Brigham
3rd Edition
0324232624, 9780324232622
