Question: 7. A firm is considering two mutually projects A and B with Internal Rate of Return 20% and 25% respectively. Uncertain about the cost of
7. A firm is considering two mutually projects A and B with Internal Rate of Return 20% and 25% respectively. Uncertain about the cost of capital of the firm the financial manager computed the NPV of the projects with the discount rates of 14% and 18%. At 14% discount rate the firms NPV were Tshs. 500,000 and Tshs. 400,000 while at 18% NPV were Tshs. 400,000 and Tshs. 500,000 respectively. How would you resolve this dilemma to the Finance Manager 7. A firm is considering two mutually projects A and B with Internal Rate of Return 20% and 25% respectively. Uncertain about the cost of capital of the firm the financial manager computed the NPV of the projects with the discount rates of 14% and 18%. At 14% discount rate the firms NPV were Tshs. 500,000 and Tshs. 400,000 while at 18% NPV were Tshs. 400,000 and Tshs. 500,000 respectively. How would you resolve this dilemma to the Finance Manager
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