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Consider the following projects, all of which have the same riskiness (all figures in $1,000s): Which one has the highest IRR? Project A Project B
Consider the following projects, all of which have the same riskiness (all figures in $1,000s):
Which one has the highest IRR?
|
| Project A | Project B | Project C | Project D | Project E |
| Initial Investment | $2,000
| $2,000 | $2,000 | $2,000 | $2,000 |
| End Yr 1 | -$525 | $200 | $125 | $600 | $1,000 |
| End Yr 2 | -$325 | $200 | $150 | $500 | $500 |
| End Yr 3 | -$50 | $350 | $200 | $450 | $500 |
| End Yr 4 | $125 | $350 | $225 | $400 | $0 |
| End Yr 5 | $500 | $500 | $350 | $350 | $0 |
| End Yr 6 | $1,000 | $500 | $500 | $300 | $250 |
| End Yr 7 | $1,500 |
| $700 |
|
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