Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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You are considering the following two projects and can take only one. Your cost of capital is
10.7%. The cash flows for the two projects are as follows ($ million):
a. What is the IRR of each project?
b. What is the NPV of each project at your cost of capital?
c. At what cost of capital are you indifferent between the two projects?
d. What should you do?
a. What is the IRR of each project?
The IRR for project A is%. (Round to one decimal place.)
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Transcribed Image Text:You are considering the following two projects and can take only one. Your cost of capital is 10.7%. The cash flows for the two projects are as follows ($ million): a. What is the IRR of each project? b. What is the NPV of each project at your cost of capital? c. At what cost of capital are you indifferent between the two projects? d. What should you do? a. What is the IRR of each project? The IRR for project A is%. (Round to one decimal place.)
(Click on the following icon in order to copy its contents into a spreadsheet.)
Year 0
Year 2
Project
A
Year 1
$24
- $100
$32
B
- $100
$50
$39
Year 3
$39
$32
Year 4
$50
$19
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Transcribed Image Text:(Click on the following icon in order to copy its contents into a spreadsheet.) Year 0 Year 2 Project A Year 1 $24 - $100 $32 B - $100 $50 $39 Year 3 $39 $32 Year 4 $50 $19
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