Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

answer this instead pls project b is posted kn the second picture You are choosing between two projects. The cash flows for the projects are

image text in transcribed
answer this instead pls
image text in transcribed
project b is posted kn the second picture
You are choosing between two projects. The cash flows for the projects are given in the following table (5 million) Project Year 0 Year 1 Year 2 $50 $25 $22 Year 3 $20 Year 4 $13 a. What are the IRRs of the two projects ? The IRR for project Ais % (Round to one decimal place.) The IRR for project is % (Round to one decimal place.) b. If your discount rate is 4.7% what are the NPVs of the two projects ? If your discount rate is 4.7%, the NPV for project Als $ million (Round to two decimal places.) If your discount rate is 4.7%, the NPV for project B is million (Round to two decimal places.) c. Why do IRR and NPV rank the two projects differently? (Select from the drop-down menus.) NPV and IRR rank the two projects differently because they are measuring different things. is measuring value creation, while is measuring return on investment. Because returns do not scale with different levels of investment, the two measures may give different rankings when the initial investments are different. You are choosing between two projects. The cash flows for the projects are given in the following table (5 million); Project Year 0 Year 1 Year 2 - $50 $25 B $100 $40 Year 3 $20 $22 Year 4 $13 $61 $20 $50 a. What are the IRRs of the two projects? b. If your discount rate is 4.7%, what are the NPVs of the two projects? c. Why do IRR and NPV rank the two projects differently? a. What are the IRRs of the two projects? The IRR for project Ais %. (Round to one decimal place) The IRR for project Bis % (Round to one decimal place.) b. If your discount rate is 4.7%, what are the NPVs of the two projects? If your discount rate is 4.7%, the NPV for project Ais million (Round to two decimal places.) If your discount rate is 4.7%, the NPV for project is million (Round to two decimal places.) c. Why do IRR and NPV rank the two projects differently? (Select from the drop-down menus.) NPV and IRR rank the two projects differently because they are measuring different things. is measuring value creation, while is measuring return on investment. Because returns do not scale with different levels of investment, the two measu Brent rankings when the initial investments are different. NPV IRR

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions

Question

HOW MANY TOTAL WORLD WAR?

Answered: 1 week ago

Question

Discuss the scope of financial management.

Answered: 1 week ago

Question

Discuss the goals of financial management.

Answered: 1 week ago