Question
A company is analyzing two mutually exclusive projects, E and F, whose cash flows are shown below: Years 0 1 2 3 4 Cash Flow
A company is analyzing two mutually exclusive projects, E and F, whose cash flows are shown below:
| Years | 0 | 1 | 2 | 3 | 4 |
| Cash Flow E | -$1,100 | $900 | $350 | $50 | $10 |
| Cash Flow F | -$1,100 | $0 | $300 | $400 | $850 |
The company's cost of capital is 12 percent, and it can get an unlimited amount of capital at that cost. What is the regular IRR (not MIRR) of the better project? (Hint: Note that the better project may or may not be the one with the higher IRR.)
| 12.53% | ||
| 17.46% | ||
| 13.88% | ||
| 13.09% |
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Value Investing
Authors: Mike Hartley
1st Edition
979-8864443309
