Question
You are choosing between two projects. The cash flows for the projects are given in the following table ($ million): LOADING.... Project Year 0 Year
You are choosing between two projects. The cash flows for the projects are given in the following table ($ million): LOADING....
Project Year 0 Year 1 Year 2 Year 3 Year 4 A -48 23 22 22 12 B -100 19 38 50 62
a. What are the IRRs of the two projects?
b. If your discount rate is 4.9%, what are the NPVs of the two projects?
c. Why do IRR and NPV rank the two projects differently?
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Analysis For Financial Management
Authors: Robert Higgins
6th Edition
0071181172, 9780071181174
