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You are considering two mutually exclusive projects that have been assigned the same discount rate of 10.5 percent. Project A has an initial cost of
You are considering two mutually exclusive projects that have been assigned the same discount rate of 10.5 percent. Project A has an initial cost of $54,500, and should produce cash inflows of $16,400, $28,900, and $31,700 for Years 1 to 3, respectively. Project B has an initial cost of $79,400, and should produce cash inflows of $0, $48,300, and $42,100, for Years 1 to 3, respectively. What is the incremental IRR?
7.83%
5.40%
15.40%
-4.67%
13.89%
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