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Question: You are choosing between two projects. The cash flows for the projects are given in the following...
You are choosing between two projects. The cash flows for the projects are given in the following table ($ million):
| Project | Year 0 | Year 1 | Year 2 | Year 3 | |
| A | -50 | 24 | 21 | $19 | $12 |
| B | $99 | $18 | $39 | $51 | $59 |
a. What are the IRRs of the two projects?
b. If your discount rate is 4.7%, what are the NPVs of the two projects?
c. Why do IRR and NPV rank the two projects differently?
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M: Finance
Authors: Marcia Cornett, Troy Adair, John Nofsinger
5th Edition
1260772357, 9781260772357
