Management of Wildhorse Measures, Inc., is evaluating two independent projects. The company uses a 10.8 percent discount rate for such projects. The costs and cash flows for the projects are shown in the following table. Year Project 1 Project 2 0 - $8,725,375 -$12,004,147 1 2,913,790 2,073,130 2 1,897,590 3,504,990 3 1,455,000 3,349,180 4 1,137,000 3,776,400 5 1,249,380 4,134,080 6 1,594,740 7 1,304,690 a. What are the IRRs for the projects? (Round answers to 3 decimal places, e.g. 15.257%.) The IRR of Project 1 is %, and the IRR of Project 2 is %. b. Does the IRR criterion indicate a different decision than the NPV criterion?
Management of Wildhorse Measures, Inc., is evaluating two independent projects. The company uses a 10.8 percent discount rate for such projects. The costs and cash flows for the projects are shown in the following table. Year Project 1 Project 2 0 - $8,725,375 -$12,004,147 1 2,913,790 2,073,130 2 1,897,590 3,504,990 3 1,455,000 3,349,180 4 1,137,000 3,776,400 5 1,249,380 4,134,080 6 1,594,740 7 1,304,690 a. What are the IRRs for the projects? (Round answers to 3 decimal places, e.g. 15.257%.) The IRR of Project 1 is %, and the IRR of Project 2 is %. b. Does the IRR criterion indicate a different decision than the NPV criterion?
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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