Question
Assume that the firm is considering two possible (mutual exclusive) projects with a weighted average cost of capital (WACC) of 12%. 0 1 2 3
Assume that the firm is considering two possible (mutual exclusive) projects with a weighted average cost of capital (WACC) of 12%.
| 0 | 1 | 2 | 3 | 4 | IRR | NPV | |
| Project A | -100 | 0 | 0 | 0 | 200 | 18.92% | $27.10 |
| Project B | -100 | 40 | 40 | 40 | 40 | 21.86% | $21.49 |
What should the firm do?
A. reject both projects
B. invest in Project A because it has the highest NPV
C. invest in Project B because it has the highest IRR
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Supernatural Provision Living In Financial Freedom
Authors: Joan Hunter, Sid Roth
1st Edition
1641238232, 978-1641238236
