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 -52 26 21 18 15 B -99 19 41 48 60
a. What are the IRRs of the two projects? (round to 2 decimal places)
b. If your discount rate is 4.8%, what are the NPVs of the two projects? (round to 2 decimal places
c. Why do IRR and NPV rank the two projects differently?
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International Financial Markets And The Firm
Authors: Piet Sercu, Raman Uppal
1st Edition
1861523548, 978-1861523549
