A manufacturing firm is considering the mutually exclusive alternatives shown below. Determine which is a better choice at a MARR if 15% based on the IRR criterion.
n Project A1 Project A2
0 $(2,500) $(3,600)
1 $1,600 $2,600
2 $1,840 $2,200
Project with the following cash flow. What is the project's IRR? The projectprojected IRR can be less that the WACC (and even negative) in which case it will be rejected.
Year: 0 1 2 3 4
Cash Flow: -1000. $250. $230 $210 $190
Your hurdle rate is 15%. The first project is a seven year project with an expected IRR of 15.2% and the second project is a five year project with an IRR 15.3%. Which project would you fund? Why would you choose that project over the other? Would you choose to fund both if you could? Why or why not?
Just One, Inc. has two mutually exclusive investment projects P & Q, shown below. Suppose the interest rate is 10%.
Project Investment Year 1 Year 2 IRR NPV(r=10%)
P -200.00 140 128.25 22.4% 33.26
Q -100.00 80.00
here are the cash flows for two mutually exclusive projects
Project C0 C1 C2 C3
A (20,000) 8,000 8,000 8,000
B (20,000) 0 0 25,000
a) at what interest rates would you prefer project A to B
b) what is the IRR of each of each project
the response has to be in excel format
Which of the following statements is incorrect?
a. Assuming a project has normal cash flows, the NPV will be positive if the IRR is less than the cost of capital.
b. If the multiple IRR problem does not exist, any independent project acceptable by the NPV method will also be acceptable by the IRR method.
c. If IRR = k