If you recall, your company needed to choose between two projects, C and D, and each required a $10,000,000 investment. Your discount rate was 8%. As a reminder, these were the forecasted cash flows:

	Project C	Project D
Year 0	($10,000,000)	($10,000,000)
Year 1	$1,500,000	$9,000,000
Year 2	$2,000,000	$3,000,000
Year 3	$2,500,000	$1,200,000
Year 4	$5,000,000	$0
Year 5	$5,000,000	$0

We said the net present value of Project C was $2,166,210 and the NPV of Project D was $1,857,950. The IRR of Project C is 14.3% and the IRR of project D is 22.5%.

Which project would you choose and why?

Answer rating: 100% (QA)

Lets break down the calculations stepbystep to compare the net present value NPV and internal rate o... View the full answer