Question
You work for an outdoor play structure manufacturing company and are trying to decide between the following two projects: Year-End Cash Flows ($ thousands) Project
You work for an outdoor play structure manufacturing company and are trying to decide between the following two projects:
| Year-End Cash Flows ($ thousands) | ||||
| Project | 0 | 1 | 2 | IRR |
| Playhouse (minor project) | 30 | 19 | 22 | 23.0% |
| Fort (major project) | 76 | 38 | 52 | 11.4% |
You can undertake only one project. If your cost of capital is 6%, use the incremental IRR rule to make the correct decision.
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Fundamentals Of Financial Management
Authors: James C. Van Horne
10th Edition
0138596875, 9780138596873
