Question
10) You are choosing between two projects. The cash flows for the projects are given in the following table ($ million): Project Year 0 Year
10) You are choosing between two projects. The cash flows for the projects are given in the following table ($ million):
| Project | Year 0 | Year 1 | Year 2 | Year 3 | Year 4 |
| A | -$49 | $24 | $21 | $22 | $12 |
| B | -$98 | $20 | $39 | $51 | $61 |
a. What are the IRRs of the two projects? (Round to 2 decimal place) b. If your discount rate is 4.9%, what are the NPVs of the two projects? (Round to 2 decimal place) c. Why do IRR and NPV rank the two projects differently?
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Probability For Risk Management
Authors: Matthew J. Hassett, Donald G. Stewart
2nd Edition
156698548X, 978-1566985482
