You've estimated the following cash flows (in $) for two projects: A B C 1 Year Project A Project B 2 0 -71 -254 3 1 15 50 4 2 21 73 5 3 29 82 6 4 25.2 113.24 The required return is 7% for both projects. 1. What is the IRR for project A? 2. What is the IRR for project B? 3. What is the NPV of project A? 4. What is the NPV of project B? 5. If the projects are mutually exclusive, which project should you choose? Project B, based on the NPV Project A, based on the IRR Project A, based on the NPV Project B, based on the IRR
You've estimated the following cash flows (in $) for two projects: A B C 1 Year Project A Project B 2 0 -71 -254 3 1 15 50 4 2 21 73 5 3 29 82 6 4 25.2 113.24 The required return is 7% for both projects. 1. What is the IRR for project A? 2. What is the IRR for project B? 3. What is the NPV of project A? 4. What is the NPV of project B? 5. If the projects are mutually exclusive, which project should you choose? Project B, based on the NPV Project A, based on the IRR Project A, based on the NPV Project B, based on the IRR
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter12: Capital Budgeting: Decision Criteria
Section: Chapter Questions
Problem 13P
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Question
You've estimated the following cash flows (in $) for two projects:
A | B | C | |
1 | Year | Project A | Project B |
2 | 0 | -71 | -254 |
3 | 1 | 15 | 50 |
4 | 2 | 21 | 73 |
5 | 3 | 29 | 82 |
6 | 4 | 25.2 | 113.24 |
The required return is 7% for both projects.
1. What is the IRR for project A?
2. What is the IRR for project B?
3. What is the NPV of project A?
4. What is the NPV of project B?
5. If the projects are mutually exclusive, which project should you choose?
Project B, based on the NPV
Project A, based on the IRR
Project A, based on the NPV
Project B, based on the IRR
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