0 two motusly exclusive projec 1 2 3 4 with the following cash flows: Project S -$1,000 $887.39 $260 $10 $5 Project L -$1,000 $10 $260 $420 $781.82 The company's WACC is 10.0%. What is the IRR of the better project? (Hint: The better project may or may not be the one with the higher IR places.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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A company is analyzing two mutually exclusive projects, S and L, with the following cash flows:
Project S
Project L
0
%
1
2
-$1,000 $887.39 $260
-$1,000 $10
$260
3
4
$5
$10
$420 $781.82
The company's WACC is 10.0%. What is the IRR of the better project? (Hint: The better project may or may not be the one with the higher IRR.) Round your answer to two decimal
places.
Transcribed Image Text:A company is analyzing two mutually exclusive projects, S and L, with the following cash flows: Project S Project L 0 % 1 2 -$1,000 $887.39 $260 -$1,000 $10 $260 3 4 $5 $10 $420 $781.82 The company's WACC is 10.0%. What is the IRR of the better project? (Hint: The better project may or may not be the one with the higher IRR.) Round your answer to two decimal places.
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