QUESTION 10

You have two alternative projects that are not mutually exclusive. Project A has an IRR of 17%. Project B has an IRR of 19%. Your corporate MARR for this year is set at 15%. Which project(s) are fundable this year in your capital budget?

QUESTION 11

You are evaluating a project cashflow that will extend over 17 years. Your normal discount rate for projects like this is 4%, but economists are predicting an average inflation rate of 3% for the next 15+ years. You want to address inflation risk using a risk premium. What discount rate will you use in calculating the NPV of your project?