Consider two mutually exclusive projects A and B: Cash Flows (dollars) Project Co A -39,500 B -59,500 C₁ 28,600 42,500 C₂ NPV at 11% 28,600 +$ 9,478 42,500 +13,282 a. Calculate IRRS for A and B. Note: Do not round intermediate calculations. Enter your answers as a perc Project A B IRR % % b. Which project does the IRR rule suggest is best? Project A Project B c. Which project is really best? Project A Project B

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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Consider two mutually exclusive projects A and B:
Cash Flows (dollars)
Project
Co
A
-39,500
B
-59,500
C₁
28,600
42,500
C₂
NPV at 11%
28,600
+$ 9,478
42,500
+13,282
a. Calculate IRRS for A and B.
Note: Do not round intermediate calculations. Enter your answers as a perc
Project
A
B
IRR
%
%
b. Which project does the IRR rule suggest is best?
Project A
Project B
c. Which project is really best?
Project A
Project B
P
Transcribed Image Text:Consider two mutually exclusive projects A and B: Cash Flows (dollars) Project Co A -39,500 B -59,500 C₁ 28,600 42,500 C₂ NPV at 11% 28,600 +$ 9,478 42,500 +13,282 a. Calculate IRRS for A and B. Note: Do not round intermediate calculations. Enter your answers as a perc Project A B IRR % % b. Which project does the IRR rule suggest is best? Project A Project B c. Which project is really best? Project A Project B P
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