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Consider projects A and B: Cash Flows (dollars) Project C 0 C 1 C 2 NPV at 10% A 37,500 27,000 27,000 + $9,360 B
Consider projects A and B: |
Cash Flows (dollars) | |||||
Project | C0 | C1 | C2 | NPV at 10% | |
A | 37,500 | 27,000 | 27,000 | + | $9,360 |
B | 57,500 | 40,500 | 40,500 | + | 12,789 |
a. | Calculate IRRs for A and B. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) |
Project | IRR |
A | % |
B | % |
b. | Which project does the IRR rule suggest is best? | ||||
|
c. | Which project is really best? | ||||
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