Question
Global Ventures is considering two exclusive projects with the following cash flows: Year Project Q ($) Project R ($) 0 -90,000 -100,000 1 40,000 50,000
Global Ventures is considering two exclusive projects with the following cash flows:
Year | Project Q ($) | Project R ($) |
0 | -90,000 | -100,000 |
1 | 40,000 | 50,000 |
2 | 45,000 | 55,000 |
3 | 50,000 | 60,000 |
The discount rate is 10%.
Requirements: a) Compute the IRR for both projects. b) Determine the NPV for both projects. c) Discuss the advantages and disadvantages of using NPV over IRR. d) Provide a recommendation on which project to undertake based on the calculations.
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Practical financial management
Authors: William r. Lasher
5th Edition
0324422636, 978-0324422634
