a. Calculate IRR's for A and B.

b. Which project does the IRR rule suggest is best?

Transcribed Image Text:

Consider two mutually exclusive projects A and B: Cash Flows (dollars) Project Co C C NPV at 12% A -35,500 25,400 25,400 +$ 7,427 B -55,500 38,500 38,500 +9,567 Consider two mutually exclusive projects A and B: Cash Flows (dollars) Project Co C C NPV at 12% A -35,500 25,400 25,400 +$ 7,427 B -55,500 38,500 38,500 +9,567

Answer rating: 100% (QA)

To calculate the Internal Rate of Return IRR for projects A and B we need to find the discount rate ... View the full answer