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 $878.54
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 | $878.54 | $260 | $10 | $5 |
| Project L | -$1,000 | $0 | $260 | $400 | $790.59 |
The company's WACC is 8.5%. 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.
%
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Corporate Valuation A Guide For Managers And Investors
Authors: Phillip R. Daves, Michael C. Ehrhardt, Ron E. Shrieves
1st Edition
0324274289, 978-0324274288
