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You have been appointed as the Financial Manager of Hi-Speed (Pty) Ltd. You need to evaluate two mutually exclusive projects with the following cash flows:

You have been appointed as the Financial Manager of Hi-Speed (Pty) Ltd. You need to evaluate two mutually exclusive projects with the following cash flows:

Year

Project A (CFs in Rands)

Project B (CFs in Rands)

0

- 40 000

- 40 000

1

18 000

4 500

2

15 000

9 500

3

9 000

17 000

4

4 500

19 000

The discount rate for these two projects is 7%.

From the above information calculate the Internal Rate of Return (IRR) of both projects A and B.


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