Question
A finance manager at TechCorp is considering two investment options: Year Option X (millions $) Option Y (millions $) 0 -60 -80 1 30 45
A finance manager at TechCorp is considering two investment options:
Year | Option X (millions $) | Option Y (millions $) |
0 | -60 | -80 |
1 | 30 | 45 |
2 | 35 | 50 |
The required rate of return is 10%.
Requirements: a) Calculate the IRR for both options. b) Determine the NPV for both options. c) Explain which option should be chosen and why. d) Discuss any potential risks associated with the chosen option.
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
