In general, if two mutually exclusive projects are being compared and one has higher NPV than...
In general, if two mutually exclusive projects are being compared and one has higher NPV than the other, but other one has higher IRR which one should the company choose?
A. the one with the higher NPV
B. The one with the higher IRR
Homework Answers
A. the one with the higher NPV
When projects are mutually exclusive, we always choose the project with the higher NPV. This is because NPV shows the return in dollar terms.
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In general, if two mutually exclusive projects are being
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Please use Excel to solve. NPV and IRR for Mutually Exclusive Projects 10. A company is...
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You are trying to determine which of two mutually exclusive projects to undertake. Project Adam has...
You are trying to determine which of two mutually exclusive projects to undertake. Project Adam has an initial outlay of $10,000, an NPV of $4,392.15, an IRR of 11.33%, and an EAA of $1,158.64. Project Eve has an initial outlay of $15,000, an NPV of $5,833.73, an IRR of 9.88%, and an EAA of $1,093.50. The cost of capital for both projects is 9%, and the projects have different lives. If the projects are repeatable, then: You should do both...
Please use Excel to solve.
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NPV versus IRR Piercy, LLC, has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) -$77,500 -$77,500 43,000 21,500 29,000 28,000 23,000 34,000 21,000 41,000 a. What is the IRR for each of these projects? If you apply the IRR decision rule, which project should the company accept? Is this decision necessarily correct? b. If the required return is 11 percent, what is the NPV for each of these projects? Which project will you choose...
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PLEASE SHOW WORK AND CALCULATIONS THANKS
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