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Discount rate 10% A B Year Cash Flows Cash Flows 0 -50,000 -50,000 1 20,000 0 2 20,000 0 3 20,000 20,000 4 20,000 50,000

Discount rate

10%

A

B

Year

Cash Flows

Cash Flows

0

-50,000

-50,000

1

20,000

0

2

20,000

0

3

20,000

20,000

4

20,000

50,000

5

20,000

20,000

What is the IRR of each project?

Project A has an IRR of 28.68% and project B has an IRR of 16.73%

Project A has an IRR of 28.68% and project B has an IRR of 15.97%

Project A has an IRR of 21.75% and project B has an IRR of 16.73%

Unable to calculate with given data.

Given the information below for project A:

Year

Project A

Project B

0

(1,000)

(1,000)

1

600

600

2

300

300

3

200

200

4

100

100

5

500

500

What is the payback period for project A? Given a 10% discount, what is the DISCOUNTED payback period for project B?

2.5 years / 3.83 years

3.25 years / 3 years

2.5 years / 2.5 years

3 years / 3.83 years

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