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 | -$ 49 | $ 23 | $ 21 | $ 21 | $ 16 |
| B | -$ 99 | $ 22 | $ 40 | $ 52 | $ 61 |
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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Illustrating Finance Policy With Mathematica
Authors: Nicholas L. Georgakopoulos
1st Edition
3319953710, 978-3319953717
