A company is analyzing two mutually exclusive projects, S and L, with the following cash flows: 0 1 2 3 4 -$1,000 $879.45 $250 $10 Project S Project L $15 $420 $734.66 -$1,000 $0 $260 The company's WACC is 9.5%. What is the IRR of the better project? (Hint: The better project may or may not be the one with the higher IRR.) Round your answer to two decimal places.
A company is analyzing two mutually exclusive projects, S and L, with the following cash flows: 0 1 2 3 4 -$1,000 $879.45 $250 $10 Project S Project L $15 $420 $734.66 -$1,000 $0 $260 The company's WACC is 9.5%. What is the IRR of the better project? (Hint: The better project may or may not be the one with the higher IRR.) Round your answer to two decimal places.
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
Problem 1PS
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Question
![A company is analyzing two mutually exclusive projects, S and L, with the following cash flows:
Project S
Project L
0
%
1
2
3
4
$879.45 $250
$10
-$1,000
-$1,000 $0
$15
$420
$260
$734.66
The company's WACC is 9.5%. What is the IRR of the better project? (Hint: The better project may or may not be the one with the higher IRR.) Round your answer to two decimal places.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Faf434c73-38f1-4a89-b981-edd99d760c82%2Fba1197e4-71e8-4f5b-bc9a-2b8fa96b4907%2Frfqm4kw_processed.png&w=3840&q=75)
Transcribed Image Text:A company is analyzing two mutually exclusive projects, S and L, with the following cash flows:
Project S
Project L
0
%
1
2
3
4
$879.45 $250
$10
-$1,000
-$1,000 $0
$15
$420
$260
$734.66
The company's WACC is 9.5%. What is the IRR of the better project? (Hint: The better project may or may not be the one with the higher IRR.) Round your answer to two decimal places.
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