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ou are choosing between two projects. The cash flows for the projects are given in the following table ($ million): Project Year 0 Year 1
ou 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 Year 4 A negative $ 52 $ 25 $ 22 $ 18 $ 17 B negative $ 102 $ 18 $ 42 $ 52 $ 62 a. What are the IRRs of the two projects? b. If your discount rate is 4.5 %, what are the NPVs of the two projects? c. Why do IRR and NPV rank the two projects differently?
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