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  3. consider two mutually exclusive projects a and b:

Consider two mutually exclusive projects A and B: ...

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Finance

Consider two mutually exclusive projects A and B:

Cash Flows (dollars)
Project C0 C1 C2 NPV at 12%
A 35,500 25,400 25,400 +$7,427
B 55,500 38,500 38,500 +9,567

a. Calculate IRRs for A and B. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

b. Which project does the IRR rule suggest is best?

multiple choice 1

  • Project A

  • Project B Incorrect

c. Which project is really best?

multiple choice 2

  • Project A

  • Project B Correct

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