Question
Higher Ground Company is presented with the following two mutually exclusive projects. The required return for both projects is 19 percent. Year Project M Project
| Higher Ground Company is presented with the following two mutually exclusive projects. The required return for both projects is 19 percent. |
| Year | Project M | Project N |
| 0 | $140,000 | $355,000 |
| 1 | 63,500 | 152,500 |
| 2 | 81,500 | 180,000 |
| 3 | 72,500 | 137,500 |
| 4 | 58,500 | 110,000 |
| Required: | |
| (a) | What is the IRR for each project? |
| IRR | |
| Project M | % |
| Project N | % |
| (b) | What is the NPV for each project? |
| NPV | |
| Project M | $ |
| Project N | $ |
| (c) | Which, if either, of the projects should the company accept? |
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Advances In Financial Machine Learning
Authors: Marcos Lopez De Prado
1st Edition
1119482089, 978-1119482086
