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NET CASH FLOWS (IN $ 1,000) YEAR 1 2 3 PROJECT A -60 15 15 15 15 15 15 PROJECT B -80 30 20 18 15 12 10 The discount rate (and the WACC) is 8%. I: The NPV of project A is < the NPV of project B. II: The IRR of project B is higher than 8%, but lower than 9%. Explain with FULL step by step calculation, why & how case 1 & 2 = FALSE 4,

NET CASH FLOWS (IN $ 1,000) YEAR 1 2 3 PROJECT A -60 15 15 15 15 15 15 PROJECT B -80 30 20 18 15 12 10 The discount rate (and the WACC) is 8%. I: The NPV of project A is < the NPV of project B. II: The IRR of project B is higher than 8%, but lower than 9%. Explain with FULL step by step calculation, why & how case 1 & 2 = FALSE 4,

Essentials Of Investments
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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NET CASH FLOWS (IN $ 1,000) YEAR 1 2 4 6. PROJECT A -60 15 15 15 15 15 15 PROJECT B -80 30 20 18 15 12 10 The discount rate (and the WACC) is 8%. 1: The NPV of project A is < the NPV of project B. II: The IRR of project B is higher than 8%, but lower than 9%. Explain with FULL step by step calculation, why & how case 1 & 2 = FALSE
Transcribed Image Text:NET CASH FLOWS (IN $ 1,000) YEAR 1 2 4 6. PROJECT A -60 15 15 15 15 15 15 PROJECT B -80 30 20 18 15 12 10 The discount rate (and the WACC) is 8%. 1: The NPV of project A is < the NPV of project B. II: The IRR of project B is higher than 8%, but lower than 9%. Explain with FULL step by step calculation, why & how case 1 & 2 = FALSE
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