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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 -$52 $27 $19 $20 $17
B -$99 $18 $39 $48 $58
a. What are the IRRs of the two projects?
b. If your discount rate is 5.2 % what are the NPVs of the two projects?
c. Why do IRR and NPV rank the two projects differently?
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