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A company is analyzing two mutually exclusive projects, S and L, with the following cash flows: 0 1 2 3 4 Project S $1,000, $877.35, $260, $10, $10 Project L -$1,000, $0, $260, $420, $772.37. The company's WACC is 10.5%. 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.

A company is analyzing two mutually exclusive projects, S and L, with the following cash flows: 0 1 2 3 4 Project S $1,000, $877.35, $260, $10, $10 Project L -$1,000, $0, $260, $420, $772.37. The company's WACC is 10.5%. 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.

Essentials Of Investments
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
Section: Chapter Questions
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A company is analyzing two mutually exclusive projects, S and L, with the following cash flows: 0 1 2 3 4 Project S $1,000, $877.35, $260, $10, $10 Project L -$1,000, $0, $260, $420, $772.37. The company's WACC is 10.5%. 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: 0 1 2 3 4 Project S $1,000, $877.35, $260, $10, $10 Project L -$1,000, $0, $260, $420, $772.37. The company's WACC is 10.5%. 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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