Question
Suppose there are two projects with following CFs: Project A: Initial investment: $150 CF(Years 1~5): $50, $40, $70, $60, $20 Cost of capital: 15% Project
Suppose there are two projects with following CFs:
Project A: Initial investment: $150 CF(Years 1~5): $50, $40, $70, $60, $20 Cost of capital: 15%
Project B: Initial investment: $200 CF (Years 1~5): $65, $10, $20, $10, $100 Cost of capital: 15%
Q: Suppose the two projects are mutually exclusive. According to the NPV and IRR rules, which projects should you accept? Why?
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Essential Mathematics For Economic Analysis
Authors: Knut Sydsaeter, Peter Hammond, Arne Strom
4th Edition
0273760688, 9780273760689
