Consider projects A and B: Cash flows (dollars) Project C 0 C 1 C 2 GO to
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Question:
| Consider projects A and B: |
Cash flows (dollars) | |||||
| Project | C 0 | C 1 | C 2 | GO to 11% | |
| A | −32,000 | 22,600 | 22,600 | + | $6,703 |
| B | −52,000 | 35,000 | 35,000 | + | 7,938 |
| a. | Calculate the IRRs for A and B. (Do not round intermediate calculations. Enter your answers as a percentage rounded to 2 decimal places.) |
| Project | TIR |
| A | % |
| B | % |
| b. | Which project does the IRR rule suggest is better? | ||||
|
| C. | Which project is really better? | ||||
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Expert Answer:
a To calculate the Internal Rate of Return IRR for projects A and B we need to find the discount rat... View the full answer
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