Question
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 $895.76
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 $895.76 $240 $10 $10
Project L -$1,000 $0 $250 $400 $794.78
The company's WACC is 10.0%. 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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Handbook Of The Equity Risk Premium
Authors: Rajnish Mehra
1st Edition
0444508996, 978-0444508997
