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NPV versus IRR Parkallen Inc. has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 -$29,000 -$29,000 1 14,400
NPV versus IRR
Parkallen Inc. has identified the following two mutually exclusive projects:
Year Cash Flow (A) Cash Flow (B)
0 -$29,000 -$29,000
1 14,400 4,300
2 12,300 9,800
3 9,200 15,200
4 5,100 16,800
What is the IRR for these projects? What might the NPV for each of these projects be if the required return is 11%. Based on range of discount rates might the company choose project a or b?
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