Question

You have to pick between three mutually exclusive projects with the following cash flows to the firm:
The cost of capital is 12%.
a. Which project would you pick using the NPV rule?
b. Which project would you pick using the IRR rule?
c. How would you explain the differences between the two rules? Which one would you rely on to make your choice?


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  • CreatedApril 15, 2015
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