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 |
negative $ −$52 |
$26 |
$ $21 |
$22 |
$17 |
B |
negative $−$102 |
$22 |
$42 |
$49 |
$58 |
a. What are the IRRs of the two projects?
b. If your discount rate is
5.3 %5.3%,
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
nothing%.
(Round to one decimal place.)
Get Answers For Free
Most questions answered within 1 hours.