Question: You are choosing between two projects. The cash flows for the projects are given h the following table ( 5milfon ) a. What are the

 You are choosing between two projects. The cash flows for the

projects are given h the following table ( 5milfon ) a. What

You are choosing between two projects. The cash flows for the projects are given h the following table ( 5milfon ) a. What are the IRRs of the two projects? b. lif your discount rate is 5.5%, what are the NPVs of the two projects? c. Why do IRR and NPV rank the mo projects difierently? a. What are the IRRs of the two projects? The inn for project Als (Round to one decimal place) The IRR for project B is , (Round to one decimal place) b. If your efcount rite is 55%, what are the NPVs of the ho projects? If your decount rate is 5.5\%, the NPV for propect AB | millon. (Round to Mo decimal places.) If your discount rate is 55%, the NPV for project B is! milion. (Round to Wwo dacimal places.) c. Why do IRR and NPV rank the hwo projects differently? (Select from the drop-down menus) NPV and IRR rank the two projects differently because they are measuring diferent things rankings when the indial investments are diferent. is measuring value creation, while is measuring return on investment. Because returns do not scale with different levels of investment, the two measures may give different Data table (Click on the following icon 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!