Question
Home Grown Caf has the following two projects with their cash flows below: SHOW ALL WORKS, NO EXCEL Year Project 1 CFs Project 2 CFs
Home Grown Caf has the following two projects with their cash flows below: SHOW ALL WORKS, NO EXCEL
| Year | Project 1 CFs | Project 2 CFs |
| 0 | -$47,379 | -$30000 |
| 1 | 16000 | 6000 |
| 2 | 13000 | 11000 |
| 3 | 18000 | 12000 |
| 4 | 15000 | 19000 |
a) Calculate the IRR (to the closest whole number) for each project and decide which project should be rejected if the required rate of return (cost of capital) is 11%.
b) if the projects are independent, then which one should be accepted based on the NPV?
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Entrepreneurial Finance
Authors: J. Chris Leach, Ronald W. Melicher
6th edition
1305968352, 978-1337635653, 978-1305968356
