Consider projects A and B: Cash Flows (dollars) Project A Co -30,500 C1 C2 21,400 21,400 NPV at 11% +$6,148.00 B -50,500 33,500 33,500 + 6,869.53 a. Calculate IRRS for A and B. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Project A B IRR % % b. Which project does the IRR rule suggest is best? O Project A ○ Project B c. Which project is really best? ○ Project A O Project B k

Corporate Fin Focused Approach
5th Edition
ISBN:9781285660516
Author:EHRHARDT
Publisher:EHRHARDT
Chapter10: The Basics Of Capital Budgeting: Evaluating Cash Flows
Section10.4: Internal Rate Of Return (irr)
Problem 2ST
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Consider projects A and B:
Cash Flows (dollars)
Project
A
Co
-30,500
C1
C2
21,400
21,400
NPV at 11%
+$6,148.00
B
-50,500
33,500
33,500
+ 6,869.53
a. Calculate IRRS for A and B. (Do not round intermediate calculations. Round your
answers to 2 decimal places.)
Project
A
B
IRR
%
%
b. Which project does the IRR rule suggest is best?
O Project A
○ Project B
c. Which project is really best?
○ Project A
O Project B
k
Transcribed Image Text:Consider projects A and B: Cash Flows (dollars) Project A Co -30,500 C1 C2 21,400 21,400 NPV at 11% +$6,148.00 B -50,500 33,500 33,500 + 6,869.53 a. Calculate IRRS for A and B. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Project A B IRR % % b. Which project does the IRR rule suggest is best? O Project A ○ Project B c. Which project is really best? ○ Project A O Project B k
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