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 | $48 | $23 | $20 | $22 | $14 |
| B | $98 | $22 | $39 | $49 | $59 |
a. What are the IRRs of the two projects?
b. If your discount rate is
5.3%,
what are the
NPVs
of the two projects?
c. Why do IRR and NPV rank the two projects differently?
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Finance Markets Investments And Financial Management
Authors: Daisy Scott
1st Edition
1639892001, 9781639892006
