In: Finance
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 | $862.58 | $260 | $10 | $15 |
Project L | -$1,000 | $10 | $260 | $380 | $829.13 |
The company's WACC is 8.5%. 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