Question
You are choosing between two projects, but can only take one. The cash flows for the projects are given in the following table: 0 1
You are choosing between two projects, but can only take one. The cash flows for the projects are given in the following table:
| 0 | 1 | 2 | 3 | 4 | |
| A | -$50 | 24 | 18 | 18 | 17 |
| B | -$99 | 21 | 39 | 50 | 58 |
a. What are the IRRs of the two projects?
b. If your discount rate is 5%, what are the NPVs of the two projects?
c. Why do IRR and NPV rank the two projects differently?
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Handbook Of Quantitative Finance And Risk Management
Authors: Cheng-Few Lee, John Lee
2010th Edition
0387771166, 978-0387771168
