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THE FOLLOWING QUESTION IS EXTRA CREDIT You have 3 projects with the following cash flows: 1 3 Year Project 1 Project 2 Project 3 0
THE FOLLOWING QUESTION IS EXTRA CREDIT You have 3 projects with the following cash flows: 1 3 Year Project 1 Project 2 Project 3 0 - $148 -823 $18 0 2 $39 0 $58 7,007 78 4 $79 - 6,493 - 244 22 41 59 For which of these projects is the IRR rule reliable? Put another way, for which of these projects would you feel comfortable that the IRR decision rule would agree with the NPV decision rule? (Choose the most appropriate answer) A. Project 1 & Project 3 B. Project 1 O C. There is not enough information available to answer this question. OD. Project 2 E. The IRR rule should agree with the NPV rule for all of the above projects. OF. Project 3
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