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Mr. Cyrus Clops, the president of Giant Enterprises, has to make a choice between two...

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Finance

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Mr. Cyrus Clops, the president of Giant Enterprises, has to make a choice between two possible investments: Cash Flows ($thousands) Project CO C1 C2 IRR(%) A -450 +250 +300 14 B -225 +120 +179 19.8 The opportunity cost of capital is 5%. Mr. Clops is tempted to take B, which has the higher IRR. However, Mr. Clops is wrong. Show him how to adapt the IRR rule to choose the best project

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