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You are being proposed two projects. One from company A and from company B. The discount rate is 12%. The follow cash flows are in
You are being proposed two projects. One from company A and from company B. The discount rate is 12%. The follow cash flows are in millions. If you can only invest in one project, which one? Why?
IRR | Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
Company A | 12% | -50 | 5 | 10 | 15 | 12 | 8 |
Company B | 13% | -48 | 20 | 20 | -5 | 10 | 12 |
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