MyLab Finance with Pearson eText -- Access Card -- for Fundamentals of Corporate Finance
4th Edition
ISBN: 9780134476445
Author: Jonathan Berk, Peter DeMarzo, Jarrad Harford
Publisher: PEARSON
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Textbook Question
Chapter 8, Problem 28P
You are choosing between two projects, but can only take one. The cash flows for the projects are given in the following table:
0 1 2 3 4 A -$50 25 20 20 15 B -$100 20 40 50 60
- What are the IRRs of the two projects?
- If your discount rate is 5%, what are the NPVs of the two projects?
- Why do
IRR andNPV rank the two projects differently?
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Students have asked these similar questions
You are choosing between two projects. The cash flows for the projects are given in the following table ($ million):
Project
Year 0
Year 1
Year 2
Year 3
Year 4
A
−$51
$25
$19
$19
$17
B
−$98
$19
$40
$51
$60
a. What are the IRRs of the two projects?
b. If your discount rate is
4.8%,
what are the
NPVs
of the two projects?
c. Why do IRR and NPV rank the two projects differently?
You are choosing between two projects. The cash flows for the projects are given in the following table ( $ million ) : What are the IRRs of the two projects? If your discount rate is 5.4 % , what are the NPVs of the two projects? Why do IRR and NPV rank the two projects differently?
You are choosing between two projects. The cash flows for the projects are given in the following table ($ million):
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?
**round to one decimal place**
Chapter 8 Solutions
MyLab Finance with Pearson eText -- Access Card -- for Fundamentals of Corporate Finance
Ch. 8 - Prob. 1CCCh. 8 - Prob. 2CCCh. 8 - Prob. 3CCCh. 8 - Prob. 4CCCh. 8 - Prob. 5CCCh. 8 - Prob. 6CCCh. 8 - Prob. 7CCCh. 8 - For mutually exclusive projects, explain why...Ch. 8 - Prob. 9CCCh. 8 - Prob. 10CC
Ch. 8 - Prob. 11CCCh. 8 - Prob. 12CCCh. 8 - Prob. 1CTCh. 8 - Prob. 2CTCh. 8 - Prob. 3CTCh. 8 - Prob. 4CTCh. 8 - Prob. 5CTCh. 8 - Prob. 6CTCh. 8 - Prob. 7CTCh. 8 - Prob. 8CTCh. 8 - Prob. 9CTCh. 8 - Prob. 10CTCh. 8 - Prob. 1DCCh. 8 - Prob. 1PCh. 8 - Prob. 2PCh. 8 - Prob. 3PCh. 8 - Prob. 4PCh. 8 - Prob. 5PCh. 8 - Prob. 6PCh. 8 - Prob. 7PCh. 8 - Prob. 8PCh. 8 - Prob. 9PCh. 8 - Prob. 10PCh. 8 - Prob. 11PCh. 8 - Prob. 12PCh. 8 - You are CEO of Rivet Networks, maker of ultra-high...Ch. 8 - Prob. 14PCh. 8 - Prob. 15PCh. 8 - Prob. 16PCh. 8 - Prob. 17PCh. 8 - Prob. 18PCh. 8 - Prob. 19PCh. 8 - Prob. 20PCh. 8 - Prob. 21PCh. 8 - Prob. 22PCh. 8 - Prob. 23PCh. 8 - Prob. 24PCh. 8 - Prob. 25PCh. 8 - Prob. 26PCh. 8 - Prob. 27PCh. 8 - You are choosing between two projects, but can...Ch. 8 - Prob. 29PCh. 8 - Prob. 30PCh. 8 - Prob. 31PCh. 8 - Prob. 32PCh. 8 - Prob. 33PCh. 8 - Prob. 34PCh. 8 - Prob. 35PCh. 8 - Prob. 36PCh. 8 - Prob. 37PCh. 8 - Orchid Biotech Company is evaluating several...
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