Consider projects Alpha and Beta: Cash Flows ($) Project C0 C1 C2 IRR (%) Alpha −398,000 259,000 188,991 9 Beta −193,000 140,000 82,000 11 The opportunity cost of capital is 8%. Suppose you can undertake Alpha or Beta, but not both. Use the IRR rule to make the choice. (Hint: What’s the incremental investment in Alpha?) Which project did you choose?

Consider projects Alpha and Beta: Cash Flows ($) Project C0 C1 C2 IRR (%) Alpha −398,000 259,000 188,991 9 Beta −193,000 140,000 82,000 11 The opportunity cost of capital is 8%. Suppose you can undertake Alpha or Beta, but not both. Use the IRR rule to make the choice. (Hint: What’s the incremental investment in Alpha?) Which project did you choose?

Name: Consider projects Alpha and Beta:Cash Flows ($)ProjectC0C1C2IRR (%)Alp
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Description: Consider projects Alpha and Beta:Cash Flows ($)ProjectC0C1C2IRR (%)Alpha−398,000259,000188,9919Beta−193,000140,00082,00011The opportunity cost of capital is 8%. Suppose you can undertake Alpha or Beta, but not both. Use the IRR rule to make the choic

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter12: Capital Budgeting: Decision Criteria

Section: Chapter Questions

Problem 13P

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Cash Flows ($)
Project	C0	C1	C2	IRR (%)
Alpha	−398,000	259,000	188,991	9
Beta	−193,000	140,000	82,000	11

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