Net Cash Flow Project 1 Project 2 Project 3 -$1,000 --$5,000 -$2,000 1 $500 $7,500 $1,500 2 $2,500 $600 $2,000

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Consider the following investment projects:

Assume that MARR = 15%.

(a) Compute the IRR for each project.                                                                  (b) If the three projects are mutually exclusive investments, which project should be selected according to the IRR criterion?

Net Cash Flow
Project 1
Project 2
Project 3
-$1,000
--$5,000
-$2,000
1
$500
$7,500
$1,500
2
$2,500
$600
$2,000
Transcribed Image Text:Net Cash Flow Project 1 Project 2 Project 3 -$1,000 --$5,000 -$2,000 1 $500 $7,500 $1,500 2 $2,500 $600 $2,000
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