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11.  Problem 11.12 (IRR and NPV) eBook Problem Walk-Through A company is analyzing two mutually exclusive projects, S...

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Finance

11.  Problem 11.12 (IRR and NPV)

eBook Problem Walk-Through

A company is analyzing two mutually exclusive projects, S and L,with the following cash flows:

01234
Project S-$1,000$883.47$260$15$5
Project L-$1,000$5$260$400$820.32

The company's WACC is 8.5%. What is the IRR of thebetter project? (Hint: The better project may or may notbe the one with the higher IRR.) Round your answer to two decimalplaces.

  %

Answer & Explanation Solved by verified expert
3.7 Ratings (478 Votes)
Project S To find the NPV we need to put the following values in the financial calculator CF0 1000 C01 88347 F01 1 C02 260 F02 1 C03 15 F03 1 C04 5 F04 1 Press NPV then put I 85 then press down key    See Answer
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Transcribed Image Text

11.  Problem 11.12 (IRR and NPV)eBook Problem Walk-ThroughA company is analyzing two mutually exclusive projects, S and L,with the following cash flows:01234Project S-$1,000$883.47$260$15$5Project L-$1,000$5$260$400$820.32The company's WACC is 8.5%. What is the IRR of thebetter project? (Hint: The better project may or may notbe the one with the higher IRR.) Round your answer to two decimalplaces.  %

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