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eBook Problem Walk-Through A company is analyzing two mutually exclusive projects, S and L, with the following cash flows: 0 1 2 3 4 Project

eBook Problem Walk-Through

A company is analyzing two mutually exclusive projects, S and L, with the following cash flows:

0 1 2 3 4
Project S -$1,000 $879.13 $250 $5 $5
Project L -$1,000 $5 $250 $420 $749.60

The company's WACC is 8.0%. What is the IRR of the better project?

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