Question
ABC Inc. is considering Projects S and L, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and not repeatable. WACC:
ABC Inc. is considering Projects S and L, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and not repeatable.
WACC: 10.25%
Year 0 1 2 3 4
CFS -$2,050 $750 $760 $770 $780
CFL -$4,300 $1,500 $1,518 $1,536 $1,554
Find the NPV of each project
What are IRR of each project?
Which project do you choose? Why? Explain fully.
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Mathematical Control Theory And Finance
Authors: Andrey Sarychev, Albert Shiryaev, Manuel Guerra, Maria Do Rosário Grossinho
2008th Edition
3540695311, 978-3540695318
