IRR and NPV A company is analyzing two mutually exclusive projects, S and L, with the...

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IRR and NPV A company is analyzing two mutually exclusive projects, S and L, with the...

IRR and NPV

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

0

1

2

3

4

Project S	-$1,000	$879.99	$260	$15	$10
Project L	-$1,000	$0	$260	$380	$789.53

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.

NPV

A project has annual cash flows of $4,500 for the next 10 years and then $9,500 each year for the following 10 years. The IRR of this 20-year project is 13.04%. If the firm's WACC is 10%, what is the project's NPV? Round your answer to the nearest cent.

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Answer 1

Answer #1

A E F cash flows discounted cash flows 1 2 YEAR L pv@ 10% -$1,000.00 -$1,000.00 -$1,000.00 -$1,000.00 $0.00 $214.88 0 1 $879.

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Answer 2

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