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K Your boss hands you the following information about two mutually exclusive projects. She adds the following: Our discount rate is 10% and both
K Your boss hands you the following information about two mutually exclusive projects. She adds the following: "Our discount rate is 10% and both projects have IRRS over 20%. Unfortunately, we are unable to implement both, so we will go with project A since it has the highest IRR of the two." How would you respond? Give a supporting numerical analysis. Projects A B Cost of Capital 10% 10% IRR 570% Initial Cash Flow - $2000 Cash Flow in One Year $13,400 22% - $140,000 $170,800 Ranking the projects by IRR would lead to of project B is $ This means that project selected by the NPV and IRR rules. (Round to the nearest dollar as needed.) decision because the NPV of project A is $ and the NPV has the higher NPV, which results in projects being ct: 0
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