(All Steps) on page 382 IRR and NPV A company is analyzing two mutually exclusive projects, S and L, with the following cash flows: 0 1 2 3 4 5 Project A
Question: 12 on page 382
IRR and NPV A company is analyzing two mutually exclusive projects, S and L, with
the following cash flows:
| 0 | 1 | 2 | 3 | 4 | 5 | |
|
Project A
Project B |
_$400
_$600 |
$55
$300 |
$55
$300 |
$55
$50 |
$225
$50 |
$225
$49 |
The company’s WACC is 10 percent. What is the IRR of the better project? (Hint: Note
that the better project may or may not be the one with the higher IRR.)
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