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    Monocle Enterprise: IRR for two mutually exclusive investmen

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    Mr. Polly Femus, the president of Monocle Enterprise, is evaluating the following two mutually exclusive investments:

    Cash Flows
    C0 C1 C2
    Project A -$400 $241 $293
    Project B - 200 131 172

    a) Determine the IRR for each.
    b) If Mr. Femus chooses the project with the higher IRR, under what circumstances will his choice be incorrect?
    c) At what discount rate would Mr. Femus be indifferent between the two projects?

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    https://brainmass.com/business/internal-rate-of-return/monocle-enterprise-two-mutually-exclusive-investment-205160

    Solution Preview

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    Mr. Polly Femus, the president of Monocle Enterprise, is evaluating the following two mutually exclusive investments:
    Year Cash Flow
    Project A Project B
    0 $(400.00) $(200.00)
    1 $241.00 $131.00
    2 $293.00 $172.00
    a) Determine the IRR for each.
    Project A Project ...

    Solution Summary

    The expert shows how to calculate the IRR for mutually exclusive projects for Monocle Enterprise.

    $2.19

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