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) | negative 2626 | 1717 | 2222 | 30.330.3% |
| Fort (major poject) | negative 7676 | 3838 | 5151 | 10.610.6% |
You can undertake only one project. If your cost of capital is
8 %8%,
use the incremental IRR rule to make the correct decision.
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Financial Institutions Investments And Management An Introduction
Authors: Herbert B. Mayo
8th Edition
0324178174, 9780324178173
