Question: Consider projects Alpha and Beta: Cash Flows ($) C1 251,000 Project Alpha Beta Co -390,000 -190,000 136,000 122,000 C2 220,999 IRR () 14 24

Consider projects Alpha and Beta: Cash Flows ($) C1 251,000 Project Alpha

Consider projects Alpha and Beta: Cash Flows ($) C1 251,000 Project Alpha Beta Co -390,000 -190,000 136,000 122,000 C2 220,999 IRR () 14 24 The opportunity cost of capital is 8%. Suppose you can undertake Alpha or Beta, but not both. Use the IRR rule to make the choice. (Hint: What's the incremental investment in Alpha?) Which project did you choose? O Beta Alpha

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