Question: You are choosing between two projects. The cash flows for the projects are given in the following table (s milion): a. What are the IRRs

 You are choosing between two projects. The cash flows for the
projects are given in the following table (s milion): a. What are

You are choosing between two projects. The cash flows for the projects are given in the following table (s milion): a. What are the IRRs of the two projects? b. If your dincount rate is 4.9%, what are the NPVis of the two projects? c. Why do IRR and NPV rank the two projects differenty? a. What are the IPRs of the two projects? The IRR for project A is K. (Round to one decimal place) The iRg for project B is \%. (Round to one decimai place) b. If your discount rate is 49%, what ore ne NPVs of the two projects? Vyour discount rate is 4.9%, the NPV for project A is $ millon. (Round to two decimal places) If your discount rate is 4.9%, the NPV for project B is $ milion. (Round to two decimal places.) c. Why do IRR and NPV rank the two projects differently? (Select from the drog-down menus) NPV and IRR rank the two projects deferently because they are measuring diferent things: k measiring value creation, while is measuring retum on investment. Because recums de not scale with different levels of investment, the two measures may give diferent raviings when the inital investrents are different Data table (Click on the following icon D in order to copy its contents into a spreadsheet.)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!