Problem 8-19 NPV/IRR (LO2)

Consider two mutually exclusive projects A and B:

	Cash Flows (dollars)
Project	C0	C1	C2	NPV at 12%
A	32,500	23,000	23,000	+$6,371
B	52,500	35,500	35,500	+7,497

a. Calculate IRRs for A and B. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

Project	IRR
A		%
B		%

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

multiple choice 1

• Project A

• Project B

c. Which project is really best?

multiple choice 2

• Project A

• Project B