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Posted by: Homeworkhelp
Price Quoted by Student: $6
Posted On: 2011-05-18 06:06:25
 
Question

IRR and NPV A company is analyzing two mutually exclusive projects, S and L with the following cash flows

 

11-12 IRR and NPV 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            $900                $250                $10                  $10

Project L         -$1,000            $0                    $250                $400                $800

 

The company’s WACC is 10 percent. What is the IRR of the better project? (Hint: Note that the better project may or may not be the one with the higher IRR)


Solutions
Project S Year Cash flow PV factor
Price $6
Attachment 1: 11-12 IRR and NPV.doc
Solution Posted By: Homeworkhelp    Posted on: 18-05-2011