A company is analyzing two mutually exclusive projects, S and L, with the following cash flows: 0 1 2 3 4 Project...

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Finance

A company is analyzing two mutually exclusive projects, S and L,with the following cash flows:
0 1 2 3 4
Project S -$1,000 $887.39 $260 $10 $5
Project L -$1,000 $5 $250 $400 $833.00
The company's WACC is 9.0%. What is the IRR of the betterproject? (Hint: The better project may or may not be theone with the higher IRR.) Round your answer to two decimalplaces.
%

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3.8 Ratings (437 Votes)

I have calculated these in Excel Please take a look at thetables belowAlso I have first See Answer

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Transcribed Image Text

A company is analyzing two mutually exclusive projects, S and L,with the following cash flows:01234Project S-$1,000$887.39$260$10$5Project L-$1,000$5$250$400$833.00The company's WACC is 9.0%. What is the IRR of the betterproject? (Hint: The better project may or may not be theone with the higher IRR.) Round your answer to two decimalplaces.%

Project S	-$1,000	$887.39	$260	$10	$5
Project L	-$1,000	$5	$250	$400	$833.00