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Q Search this course Homework - Graded X ment: Chapter 11 Homework Graded Assignment Score: 60.00 % Save Submit Assignment fo

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К L м 1 Year Project S Project L 2 0 -1000 -1000 3 1 889.11 0 4 2 260 260 5 5 400 6 4 5 828.41 7 NPV 30.33 81.22 8 Formula us

NPV of project S is $30.33

NPV of project L is $81.22

The project with higher NPV (that is project L with NPV of $81.22) is the better project.

Now, we need to determine the IRR of the better project, that is IRR of project L

P 1 Year Project L -1000 2 0 3 1 0 4 2 260 5 3 400 6 4 828.41 7 IRR= 12.62% Formula used: IRR(Q2:Q6) 8

Answer: IRR of project L is 12.62%

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