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 | $49 | $24 | $20 | $18 | $13 |
| B | $100 | $22 | $38 | $48 | $62 |
a. What are the IRRs of the two projects?
b. If your discount rate is
4.6%,
what are the
NPVs
of the two projects?
c. Why do IRR and NPV rank the two projects differently?
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Foreign Direct Investment Smart Approaches To Differentiation And Engagement
Authors: Daniel Nicholls
1st Edition
1409423573,1409471381
