Internal rates of return on projects

Related BrainMass Solutions

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  The internal rates of return are as follows: Project Internal Rate of Return 1 12% 2

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  Projects with higher rates of return are more desirable than those with lower rates of return. If resources to invest are unlimited, management should accept all projects that earn a return in excess of their designated hurdle (minimum) rate.

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  While IRR is a convenience metric to compare to interest rates and annual rates of return of other projects, it views all projects as basically the same size. A 19% project A and 19% project B are equal in the eyes of IRR.

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  IRR method is that it often gives unrealistic rates of return. The IRR method is that it may provide different rates of return. 3. NPV is better than IRR.

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• Week 5:Integrative problems on Capital Budgeting.

  According to the internal rates of return, which investment(s) should the firm make? Why? e. According to both the net present values and internal rates of return, which investments should the firm make? f.

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  b) Which project(s) should be chosen if internal rate of return period is the criteria for each project?