Question
A company is analyzing two mutually exclusive projects, S and L, whose cash flows are shown below: Years. 1. 2 3. 4 interest rate= 12%
A company is analyzing two mutually exclusive projects, S and L, whose cash flows are shown below:
Years. 1. 2 3. 4 interest rate= 12%
S -1,100 1,000 350 50
L -1,100 0 300 1,500
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, i.e., the project which the company should choose if it wants to maximize its stock price?
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Bankers Handbook On Credit Management
Authors: Indian Institute Of Banking & Finance
1st Edition
9387957853, 978-9387957855
