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You work for an outdoor play structure manufacturing company and are trying to decide between the following two projects: Year-End Cash Flows ($ thousanc) Project
You work for an outdoor play structure manufacturing company and are trying to decide between the following two projects: Year-End Cash Flows ($ thousanc) Project 0 1 2 Playhouse (minor project) -29 17 21 Fort (major poject) -79 39 51 You can undertake only one project. If your cost of capital is 6%, which one should you choose? Playhouse because the incremental IRR is 2.52% Playhouse because the IRR of Fort is lower O Not sure, it depends O Fort because the incremental IRR is 2.52%
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