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6. IRR rule Consider projects Alpha and Beta: Cash Flows ($) C1 400,000+241,000 +293,000 IRR (%) 21 31 C2 Project Alpha Beta -200,000 +131,000 +172,000
6. IRR rule Consider projects Alpha and Beta: Cash Flows ($) C1 400,000+241,000 +293,000 IRR (%) 21 31 C2 Project Alpha Beta -200,000 +131,000 +172,000 The opportunity cost of capital is 8%. Suppose you can undertake Alpha or Beta, but not both. Use the IRR rule to make the choice. (Hint: What's the incremental investment in Alpha?)
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