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The following two projects are mutually exclusive meaning we can only choose one. The cost of capital is 8% and we must do the calculation
- The following two projects are mutually exclusive meaning we can only choose one. The cost of capital is 8% and we must do the calculation for the NPV and the IRR for both. If they conflict (and you know they will LOL), we must calculate the IRR of the delta project and base our decision on that indicator!
| Stock | ABC | XYZ | D Project cash Flow |
| I0 | ($50,000) | ($50,000) |
|
| Year 1 | 0 | 0 |
|
| Year 2 | $25,000 | 0 |
|
| Year 3 | $25,000 | 0 |
|
| Year 4 | $25,000 | $82,000 |
|
| NPV |
|
| ---------------------- |
| IRR |
|
|
|
| IRRDProj. |
|
|
|
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Collectible Investments For The High Net Worth Investor
Authors: Stephen Satchell
1st Edition
0123745225,0080923054
