23 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 0 1 2 B 4 5 Chapter 9 Question 12 Input area: Year 0 Year 1 Year 2 Year 3 Year 4 Required return Output area: $ SASASASAA Year 0 $ A (41,300) 19,100 17,800 15,200 8,400 NPV A NPV B The NPV decision rule implies you accept SSSSA SA CF difference $ $ $ IRR A IRR B The implication of ranked IRR is to accept Project A This may not be a correct decision however, because the IRR has a ranking problem for mutually exclusive projects To see if the ranked IRRs lead to the correct decision or not, we need to evaluate the project NPVs. B (41,300) 6,300 14,200 17,900 30,300 13475% 18.75% #VALUE! #VALUE! #VALUE! D I c