Question
1)You are choosing between two projects. The cash flows for the projects are given in the following table (millions): Project Year 0 Year 1 Year
1)You are choosing between two projects. The cash flows for the projects are given in the following table (millions):
Project | Year 0 | Year 1 | Year 2 | Year 3 | Year 4 |
A |
$52 |
$28 |
$19 |
$23 |
$18 |
B | -97
|
$21 |
$43 |
$53 |
$63 |
a. What are the IRRs of the two projects?
b. If your discount rate is 5.7%, what are the NPVs of the two projects?
c. Why do IRR and NPV rank the two projects differently?
Please help me step by step specially with the first question
2)The Sisyphean Company's common stock is currently trading for $26.25 per share. The stock is expected to pay a $2 dividend at the end of the year and the Sisyphean Company's equity cost of capital is 10%. If the dividend payout rate is expected to remain constant, then the expected growth rate in the Sisyphean Company's earnings is closest to:
A.3.57%
B.2.38%
C.4.76%
D.1.19%
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