Question
In: Finance
A company is analyzing two mutually exclusive projects, S and L, with the following cash flows:...
A company is analyzing two mutually exclusive projects, S and L, with the following cash flows:
| 0 | 1 | 2 | 3 | 4 |
| Project S | -$1,000 | $856.03 | $260 | $15 | $15 |
| Project L | -$1,000 | $10 | $260 | $380 | $762.25 |
The company's WACC is 9.0%. What is the IRR of the better project? (Hint: The better project may or may not be the one with the higher IRR.) Round your answer to two decimal places.
Solutions
Expert Solution
FORMULA:
BASED ON NPV AND IRR, SELECT THE HIGHER NPV PROJECT.
PROJECT L HAS BETTER NPV THAN PROJECT S. SO PROJECT L IS BETTER.
jeff jeffy answered 2 years agoRelated Solutions
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Round your answer to two decimal places.
A company is analyzing two mutually exclusive projects, S and L, with the following cash flows:...
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with the following cash flows:
0
1
2
3
4
Project S
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$250
$10
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$5
$240
$380
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2
3
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Round your answer to two decimal places. %
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0
1
2
3
4
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project? (Hint: The better project may or may not be the one with
the higher IRR.) Round your answer to two decimal places.
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