Question
Marissa Manufacturing is presented with the following two mutually exclusive projects. The required return for both projects is 15 percent. Year Project M Project N
Marissa Manufacturing is presented with the following two mutually exclusive projects. The required return for both projects is 15 percent.
| Year | Project M | Project N |
| 0 | -139,000 | -366,000 |
| 1 | 64,600 | 147,000 |
| 2 | 82,600 | 191,000 |
| 3 | 73,600 | 132,000 |
| 4 | 59,600 | 121,000 |
a. What is the IRR for each project?
b. What is the NPV for each project?
c. Which, if either, of the projects should the company accept?
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Financial Management Theory and Practice
Authors: Eugene F. Brigham, Michael C. Ehrhardt
15th edition
130563229X, 978-1305632301, 1305632303, 978-0357685877, 978-1305886902, 1305886909, 978-1305632295
