A company is analyzing two mutually exclusive projects, S and L, with the following cash flows:Project S-$1,000$899.96$240$15$5Project L-$1,000$10$250$380$843.66The company's WACC is 10.0%. 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.

Answered: A company is analyzing two mutually…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 22E

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A company is analyzing two mutually exclusive projects, S and L, with the following cash flows:

Project S	-$1,000	$899.96	$240	$15	$5
Project L	-$1,000	$10	$250	$380	$843.66

The company's WACC is 10.0%. 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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