Green Grocers is deciding among two mutually exclusive projects. The two projects have the following cash flows:
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Question:
Green Grocers is deciding among two mutually exclusive projects. The two projects have the following cash flows:
Project A Project B
Year Cash Flow Cash Flow
0 -$50,000 -$30,000
1 10,000 6,000
2 15,000 12,000
3 40,000 18,000
4 20,000 12,000
The company%u2019s weighted average cost of capital is 10 percent (WACC = 10%). What is the net present value (NPV) of the project with the highest internal rate of return (IRR)?
Related Book For
Essentials of Managerial Finance
ISBN: 978-0324422702
14th edition
Authors: Scott Besley, Eugene F. Brigham
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