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 $862.41
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 $862.41 $260 $15 $10 Project L -$1,000 $10 $250 $380 $858.35 The company's WACC is 9.5%. 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. %?
Step by Step Solution
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There are 3 Steps involved in it
Step: 1
To calculate the Internal Rate of Return IRR for each project we can use the following formula ...
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Fundamentals of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
Concise 6th Edition
324664559, 978-0324664553
