Consider two mutually exclusive projects A and B: Cash Flows (dollars) Project A B Co -35,500 -55,500 C₂ 25,400 25,400 38,500 38,500 NPV at 12% +$ 7,427 +9,567 a. Calculate IRRS for A and B. Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal Project IRR A %
Consider two mutually exclusive projects A and B: Cash Flows (dollars) Project A B Co -35,500 -55,500 C₂ 25,400 25,400 38,500 38,500 NPV at 12% +$ 7,427 +9,567 a. Calculate IRRS for A and B. Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal Project IRR A %
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
Problem 1PS
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Transcribed Image Text:Consider two mutually exclusive projects A and B:
Cash Flows (dollars)
Project
Co
C₁
C₂
A
-35,500
25,400
B
-55,500
38,500
25,400
38,500
NPV at 12%
+$ 7,427
+9,567
a. Calculate IRRS for A and B.
Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.
Project
A
B
IRR
%
25.00%
b. Which project does the IRR rule suggest is best?
Project A
O Project B
c. Which project is really best?
O Project A
Project B
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