Project A has an IRR of 30%, based on an initial investment of $6000, and generating $1000,$1000, and $1000 for the next four years. Project B has an IRR of 19.78% based on an initial investment of $6000 and will generate $1000, $1000 , $1000, and $8000 over the next 4 years. What is the crossover rate for both projects? under what conditions would i choose project A over B? and what conditions would i choose porject B over A?
Project A has an IRR of 30%, based on an initial investment of $6000, and generating $1000,$1000, and $1000 for the next four years. Project B has an IRR of 19.78% based on an initial investment of $6000 and will generate $1000, $1000 , $1000, and $8000 over the next 4 years. What is the crossover rate for both projects? under what conditions would i choose project A over B? and what conditions would i choose porject B over A?
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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Project A has an IRR of 30%, based on an initial investment of $6000, and generating $1000,$1000, and $1000 for the next four years.
Project B has an IRR of 19.78% based on an initial investment of $6000 and will generate $1000, $1000 , $1000, and $8000 over the next 4 years.
What is the crossover rate for both projects?
under what conditions would i choose project A over B? and what conditions would i choose porject B over A?
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