Search for question
Question

CENGAGE MINDTAP

Ch 11-End-of-Chapter Problems - The Basics of Capital Budgeting

Back to Assignment

Attempts

4. Problem 11.12 (IRR and NPV)

Average/1

eBook

Problem Walk Through

A company is analyzing two mutually exclusive projects, 5 and L, with the following cash flows:

Project S

Project L

-$1,000 $876.32 $250 $10 $15

-$1,000 $5 $260 $420 $734.52

The company's WACC is 10.5%. 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.

Grade it Now

Q Search this co

Save & Continue

Continue without saving

Fig: 1