Better plc is comparing two mutually exclusive projects, whose details are given below. The company’s cost of capital is 12 per cent. Project A Project B £m £m Year 0 (150) (152) Year 1 40 80 Year 2 50 80 Year 3 60 50 Year 4 60 40
Better plc is comparing two mutually exclusive projects, whose details are given below.
The company’s cost of capital is 12 per cent.
Project A Project B
£m £m
Year 0 (150) (152)
Year 1 40 80
Year 2 50 80
Year 3 60 50
Year 4 60 40
Year 5 80 30
(a). Using the
(b). Using the
(c). If the cost of capital increases to 20 per cent in year 5, would your advice change?
Hello.i have the solution you send me but i am trying to understand where did you get the calculations for in the worknotes tabel.
I still cant calculate the IRR.i really dont understand how to do it.
Can you help me please by using the numbers in the tabel so i can understand what is that you are adding or taking away please?
I know how to calculate the NPV but not the IRR.
I have went over and over this IRR but i still dont understand how you calculate it using the pv and the npv.i dont wanna use excel.
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Hello.thank you for replying.
May i ask why did u choose the cost of capital between 22 and 25%.
I know u need an positive
U already have a positive npv of 51,81 with 12% cost of capital.
Why u didnt used that one like a positive npv and to add just one cost of capital fir a negative npv?
Thank you
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