# Monocle Enterprise: IRR for two mutually exclusive investmen

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?

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.