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Intro You've estimated the following cash flows (in $) for two mutually exclusive projects: Year Project A Project B 0 -5,600 -8,400 1 1,325 1,325
Intro You've estimated the following cash flows (in $) for two mutually exclusive projects: Year Project A Project B 0 -5,600 -8,400 1 1,325 1,325 2 2,148 2,148 3 4,277 8,055 The required return for both projects is 8%. A Attempt 1/10 for 10 pts. Part 1 What is the IRR for project A? 3+ decimals Submit Attempt 1/10 for 10 pts. Part 2 What is the IRR for project B? 3+ decimals Submit Part 3 Attempt 1/5 for 10 pts. Which project seems better according to the IRR method? Project A Project B Correct Project A's IRR of 0.149 is greater than project B's IRR of 0.132. Project A is thus better. Since the IRR is also greater than the required return, the company will add value by pursuing project A. Attempt 1/10 for 10 pts. Part 4 What is the NPV for project A? + decimals Submit Attempt 1/10 for 10 pts. Part 5 What is the NPV for project B? 0+ decimals Submit
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