80.2K
Verified Solution
Link Copied!
You are choosing between two projects. The cash flows for the projects are given in the following table ($ million):
Project Year 0 Year 1 Year 2 Year 3 Year 4
A $52 $25 $20 $22 $13
B $98 $21 $40 $48 $59
.
a. What are the IRRs of the two projects?
b. If your discount rate is
5.4%, what are the NPVs of the two projects?
c. Why do IRR and NPV rank the two projects differently?
a. What are the IRRs of the two projects?
The IRR for project A is
21.5
21.5%. (Round to one decimal place.)
The IRR for project B is
__________________
%. (Round to one decimal place.)
c. Why do IRR and NPV rank the two projects differently?
Answer & Explanation
Solved by verified expert
