Cash Flows in $(000) Project Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
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Question:
Cash Flows in $(000)
| Project | Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|---|
| Project C | -120 | 35 | 55 | 90 | 75 | 85 |
| Project S | -120 | 82 | 75 | 65 | 45 | 30 |
Internal Rate of Return (IRR)
Project C IRRC = 40%
Project S IRRS = 50%
Net Present Value (NPV)
| Project | NPV | Interest |
|---|---|---|
| Project C | $99.35 | 12.5% |
| Project S | $91.15 | 12.5% |
What would be some implications for using internal rate of return (IRR) versus net present value (NPV) for deciding on whether to choose Project C or Project S?
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