June.com is considering two projects given below: if the two projects have the same payback period, what would be project 2’s internal rate of return (IRR)? (Hint: you need to find project 1’s payback and find project 2 cashflow at year 0 using project 1’s payback period). Year Project 1 Project 2 Cash Flow Cash Flow cumulative cash flow 0 -$100 ? 1 30 40 -$70 2 50 80 -$20 3 40 60 $20 4 50 60 $70
June.com is considering two projects given below: if the two projects have the same payback period, what would be project 2’s internal rate of return (IRR)? (Hint: you need to find project 1’s payback and find project 2 cashflow at year 0 using project 1’s payback period). Year Project 1 Project 2 Cash Flow Cash Flow cumulative cash flow 0 -$100 ? 1 30 40 -$70 2 50 80 -$20 3 40 60 $20 4 50 60 $70
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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June.com is considering two projects given below:
if the two projects have the same payback period, what would be project 2’s
Year |
Project 1 |
Project 2 |
||
|
Cash Flow |
Cash Flow |
cumulative cash flow |
|
0 |
-$100 |
? |
||
1 |
30 |
40 |
-$70 |
|
2 |
50 |
80 |
-$20 |
|
3 |
40 |
60 |
$20 |
|
4 |
50 |
60 |
$70 |
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