You are considering two independent projects with the following cash flows:

	Project A	Project B
Year 1	$ 2,500	$ 4,000
Year 2	3,000	3,500
Year 3	3,500	3,000
Year 4	4,000	2,500

Both Projects A & B have the same initial outlays of £10,000. You expect a return rate of 5% on your investment.

Which project will you chipse to invest based on the IRR rule?

Answer rating: 100% (QA)

SOLUTION To compare the two projects using the IRR rule we need to calculate the IRR for each projec... View the full answer