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
To answer part a we need to find that discount (interest) rate at which the NPV's of both the streams ...
The solution discusses cash flows for two mutually exclusive projects - NPV vs. IRR.