Question
You are considering the following two mutually exclusive projects. year Project A Project B 0 -$36,000 -$36,000 1 21,500 13,690 2 13,500 11,500 3 13,500
You are considering the following two mutually exclusive projects.
| year | Project A | Project B |
| 0 | -$36,000 | -$36,000 |
| 1 | 21,500 | 13,690 |
| 2 | 13,500 | 11,500 |
| 3 | 13,500 | 25,300 |
1) What is the internal rate of return (IRR) of projects A and B?
2) What is the NPV of projects A and B if the required rate of return is 9%? Which project we should choose?
3) What is the NPV of projects A and B if the required rate of return is 12%? Which project we should choose?
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Entrepreneurial Finance Venture Capital Deal Structure And Valuation
Authors: Janet Kiholm Smith, Richard L. Smith
2nd Edition
1503603210, 978-1503603219
