Loose Leaf for Corporate Finance Format: Loose-leaf
Loose Leaf for Corporate Finance Format: Loose-leaf
12th Edition
ISBN: 9781260139716
Author: Ross
Publisher: Mcgraw Hill Publishers
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Chapter 5, Problem 10CQ

Internal Rate of Return Projects A and B have the following cash flows:

Year Project A Project B
0 –$1 .000 $2.000
1 CIA C IB
2 C2A C2B
3 C3A C3B

a. If the cash flows from the projects are identical, which of the two projects would have a. higher IRR? Why?

b. If CIB = 2C1A, C2B = 2C2A, and C3B = 2C3A, then is IRRA = IRRB?

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Loose Leaf for Corporate Finance Format: Loose-leaf

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