Question
You are choosing between two projects. The cash flows for the project are given in the following table ($ million) : Project Year 0 Year
You are choosing between two projects. The cash flows for the project are given in the following table ($ million) :
| Project | Year 0 | Year 1 | Year 2 | Year 3 | Year 4 |
| A | -$51 | $27 | $22 | $22 | $13 |
| B | -$100 | $22 | $39 | $51 | $61 |
A. What are the IRRS of the two projects?
B. If your discount rate is 4.8%, what are the NPV of the two project's?
C. Why do IRR and NPV rank the two projects differently?
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International Financial Reporting A Practical Guide
Authors: Alan Melville
6th edition
1292200743, 1292200766, 9781292200767, 978-1292200743
