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Consider two mutually exclusive projects A and B: Cash Flows (dollars) Project C0 C1 C2 NPV at 12% A 34,000 24,200 24,200 +$6,899 B 54,000
Consider two mutually exclusive projects A and B: Cash Flows (dollars) Project C0 C1 C2 NPV at 12% A 34,000 24,200 24,200 +$6,899 B 54,000 37,000 37,000 +8,532 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? Project A Project B c. Which project is really best? Project A Project B
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