Question
Better Health, Inc. is evaluating two investment projects, each of which requires an up-front expenditure of $2.5 million. The projects are expected to produce the
Better Health, Inc. is evaluating two investment projects, each of which requires an up-front expenditure of $2.5 million. The projects are expected to produce the following net cash inflows:
| Year | Project A | Project B |
| 1 | 750,000 | 2,000,000 |
| 2 | 1,250,000 | 1,250,000 |
| 3 | 2,000,000 | 750,000 |
A) What is each project's IRR?
| B) What is each project's NPV if the cost of capital is 10%? |
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Principles of managerial finance
Authors: Lawrence J Gitman, Chad J Zutter
12th edition
9780321524133, 132479540, 321524136, 978-0132479547
