Problem

NPV and IRR. Higher Ground Company is presented with the following two mutually exclusive...

NPV and IRR. Higher Ground Company is presented with the following two mutually exclusive projects. The required return for both projects is 15 percent.

Year

Project M

Project N

0

−$145,000

−$350,000

1

63,000

155,000

2

81,000

175,000

3

72,000

140,000

4

58,000

105,000

a. What is the IRR for each project?


b. What is the NPV for each project?


c. Which, if either, of the projects should the company accept?

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