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You are considering the following two projects and can only take one. Your cost of capital is 11.2%. The cash flows for the two projects
You are considering the following two projects and can only take one. Your cost of capital is 11.2%. The cash flows for the two projects are as follows ($ million): Project B Year 0 -$98 - $98 Year 1 $24 $52 Year 2 $32 $40 Year 3 $40 $32 Year 4 $52 $20 a. What is the IRR of each project? b. What is the NPV of each project at your cost of capital? c. At what cost of capital are you indifferent between the two projects? d. What should you do? a. The IRR for project Ais %. (Round to one decimal place.) The IRR for project Bis %. (Round to one decimal place.) b. The NPV for project A is $ million. (Round to two decimal places.) The NPV for project B is $ million. (Round to two decimal places.) c. You will be indifferent if the cost of capital is %. (Round to one decimal place.)
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