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 | negative $ 50$50 | $ 23$23 | $ 18$18 | $ 22$22 | $ 14$14 |
| B | negative $ 100$100 | $ 18$18 | $ 41$41 | $ 48$48 | $ 62$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?
a. What are the IRRs of the two projects?
The IRR for project A is ___%.
(Round to one decimal place.)
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Financial Analysis And Modeling Using Excel And VBA
Authors: Chandan Sengupta
2nd Edition
047027560X, 978-0470275603
