Question
Consider projects A and B: Cash Flows (dollars) Project C0 C1 C2 NPV at 11% A 32,000 22,600 22,600 +$6,703 B 52,000 35,000 35,000 +7,938
Consider projects A and B:
Cash Flows (dollars)
Project C0 C1 C2 NPV at 11%
A 32,000 22,600 22,600 +$6,703
B 52,000 35,000 35,000 +7,938
a. Calculate IRRs for A and B. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)
b. Which project does the IRR rule suggest is best?
c. Which project is really best?
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Money Banking And Financial Markets
Authors: Stephen Cecchetti, Kermit Schoenholtz
6th Edition
1260226786, 9781260226782
