Explore BrainMass

Explore BrainMass

    Cash Flows for Two Mutually Exclusive Projects: NPV versus IRR

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Here are the cash flows for two mutally exclusive projects:

    Project A: Co : -20,000 C1: +8,000 C2: +8000 C3: +8000

    Project B: C0: -20,000 C1: 0 C2: 0 C3: +25,000

    a. At what interest rates would you prefer project A to B?

    b. What is the IRR of each project?

    © BrainMass Inc. brainmass.com March 4, 2021, 6:01 pm ad1c9bdddf
    https://brainmass.com/business/net-present-value/cash-flows-mutually-exclusive-projects-npv-irr-23809

    Solution Preview

    To answer part a we need to find that discount (interest) rate at which the NPV's of both the streams ...

    Solution Summary

    The solution discusses cash flows for two mutually exclusive projects - NPV vs. IRR.

    $2.49

    ADVERTISEMENT