You are choosing between two projects. The cash flows for the projects are given in the following table ($ million):Year 2Year 0- $51- $101$21$42ProjectABYear 1$25$20a. What are the IRRs of the two projects?b. If your discount rate is 4.6%, what are the NPVs of the two projects?c. Why do IRR and NPV rank the two projects differently?%. (Round to one decimal place.)a. What are the IRRs of the two projects?The IRR for project A isThe IRR for project B is%. (Round to one decimal place.)b. If your discount rate is 4.6%, what are the NPVs of the two projects?If your discount rate is 4.6%, the NPV for project A is $CYear 3$21$50Year 4$15$59million. (Round to two decimal places.)million. (Round to two decimal places.)If your discount rate is 4.6%, the NPV for project B is $c. Why do IRR and NPV rank the two projects differently?(Select from the drop-down menus.)is measuring return onNPV and IRR rank the two projects differently because they are measuring different things. Vis measuring value creation, while.investment. Because returns do not scale with different levels of investment, the two measures may give different rankings when the initial investments are different.

NPV is a Capital budgeting techniques which help in decision making that the Project is viable or…

You are choosing between two projects. The cash flows for the projects are given in the following table ($ million): Year 2 Year 0 - $51 -$101 $21 $42 Project A B Year 1 $25 $20 a. What are the IRRs of the two projects? b. If your discount rate is 4.6%, what are the NPVs of the two projects? c. Why do IRR and NPV rank the two projects differently? a. What are the IRRs of the two projects? The IRR for project A is%. (Round to one decimal place.) The IRR for project B is %. (Round to one decimal place.) b. If your discount rate is 4.6%, what are the NPVs of the two projects? If your discount rate is 4.6%, the NPV for project A is $ *** Year 3 $21 $50 Year 4 $15 $59 million. (Round to two decimal places.) If your discount rate is 4.6%, the NPV for project B is $ million. (Round to two decimal places.) c. Why do IRR and NPV rank the two projects differently? (Select from the drop-down menus.) is measuring value creation, while is measuring return on NPV and IRR rank the two projects differently because they are measuring different things. investment. Because returns do not scale with different levels of investment, the two measures may give different rankings when the initial investments are different.

You are choosing between two projects. The cash flows for the projects are given in the following table ($ million): Year 2 Year 0 - $51 -$101 $21 $42 Project A B Year 1 $25 $20 a. What are the IRRs of the two projects? b. If your discount rate is 4.6%, what are the NPVs of the two projects? c. Why do IRR and NPV rank the two projects differently? a. What are the IRRs of the two projects? The IRR for project A is%. (Round to one decimal place.) The IRR for project B is %. (Round to one decimal place.) b. If your discount rate is 4.6%, what are the NPVs of the two projects? If your discount rate is 4.6%, the NPV for project A is $ *** Year 3 $21 $50 Year 4 $15 $59 million. (Round to two decimal places.) If your discount rate is 4.6%, the NPV for project B is $ million. (Round to two decimal places.) c. Why do IRR and NPV rank the two projects differently? (Select from the drop-down menus.) is measuring value creation, while is measuring return on NPV and IRR rank the two projects differently because they are measuring different things. investment. Because returns do not scale with different levels of investment, the two measures may give different rankings when the initial investments are different.

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 21P: Your division is considering two investment projects, each of which requires an up-front expenditure...

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