Question: you are considering the following two projects and can only choose one. you cost of capital is 1 0 . 9 % the cash flows

you are considering the following two projects and can only choose one. you cost of capital is 10.9% the cash flows for the two projects are as follows (in millions) PROJECT A: year 0=-101 year 1=27 year 2=30, year 3=42, year 4=50. PROJECT B: year 0=-101, year 1=50, year 2=42, year 3=30, year 4=18.1) What is the IRR of BOTH project A and project B seperately? 2) What is the NPV of BOTH project A and B seperately at a 10.9% cost of capital? 3) At what cost of capital are you indifferent between the two projects?
(Finding the cost of capital at which you will be indifferent between the two projects can be solved in two ways. One is to calculate the IRR of the difference in cash flows between the two projects. Using the cash flows from investment A minus the cash flows from investment B) PLEASE ONLY SOLVE USING EXCEL. PLEASE ENSURE ACCURACY THANK YOU

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!