# Question: Internal Rate of Return Projects A and B have the

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

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

b. If C1B = 2C1A, C2B = 2C2A, and C3B = 2C3A, then is IRRA =IRRB?

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

b. If C1B = 2C1A, C2B = 2C2A, and C3B = 2C3A, then is IRRA =IRRB?

**View Solution:**## Answer to relevant Questions

Fuji Software, Inc., has the following mutually exclusive projects.a. Suppose Fuji’s payback period cutoff is two years. Which of these two projects should be chosen? b. Suppose Fuji uses the NPV rule to rank these two ...Compute the internal rate of return for the cash flows of the following twoprojects:Mario Brothers, a game manufacturer, has a new idea for an adventure game. It can market the game either as a traditional board game or as an interactive DVD, but not both. Consider the following cash flows of the two ...This problem is useful for testing the ability of financial calculators and computer software. Consider the following cash flows. How many different IRRs are there? Year Cash Flow0 ......... -$ 1,0081 ......... ...Raphael Restaurant is considering the purchase of a $9,000 soufflé maker. The soufflé maker has an economic life of five years and will be fully depreciated by the straight-line method. The machine will produce 1,500 ...Post your question