Question
You are choosing between two projects. The cash flows for the projects are given in the following table ($ million): Project Year 0 Year 1
You are choosing between two projects. The cash flows for the projects are given in the following table ($ million):
| Project | Year 0 | Year 1 | Year 2 | Year 3 | Year 4 |
|
A |
$48 |
$26 |
$20 |
$19 |
$15 |
| B |
$101 |
$22 |
$38 |
$50 |
$ 59 |
a. What are the IRRs of the two projects?
b. If your discount rate is 5.1%, what are the NPVs of the two projects?
c. Why do IRR and NPV rank the two projects differently?
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Financing Large Projects Using Project Finance Techniques And Practices
Authors: Fouzul Khan, Robert Parra
1st Edition
9780131016347
