Question: You are considering the following two projects and can take only one. Your cost of capital is 10.7%. The cash flows for the two
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You are considering the following two projects and can take only one. Your cost of capital is 10.7%. The cash flows for the two projects are as follows ($ million): Project A B Year 0 - $102 - $102 Year 1 $23 $50 Year 2 $29 $39 Year 3 $39 $29 Year 4 $50 $21 a. What is the IRR of each project? b. What is the NPV of each project at your cost of capital? c. At what cost of capital are you indifferent between the two projects? d. What should you do? a. What is the IRR of each project? The IRR for project A is %. (Round to one decimal place.)
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