Your boss hands you the following information about two mutually exclusive projects. She adds the following: "Our discount rate is 10% and both projects have IRRS over 20%. Unfortunately, we are unable to implement both, so we will go with project A since it has the highest IRR of the two." How would you respond? Give a supporting numerical analysis. Projects A B Cost of Capital 10% 10% IRR 560% 21% D Initial Cash Flow Cash Flow in One Year - $2000 $13,200 -$150,000 $181,500 Ranking the projects by IRR would lead to decision because the NPV of project A is $ and the NPV of project B is $ This means that project projects being selected by the NPV and IRR rules. (Round to the nearest dollar as needed.) Search SAMSUNG has the higher NPV, which results in Time Remaining: 02:52:28 Cl READX c) T A Series Next 6:01 PM Nutrition Facil Valeur leun Facts

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Your boss hands you the following information about two mutually exclusive projects. She adds the following: "Our discount rate is 10% and both projects have IRRS over 20%. Unfortunately, we are unable to
implement both, so we will go with project A since it has the highest IRR of the two." How would you respond? Give a supporting numerical analysis.
Projects
A
B
Cost of Capital
10%
10%
IRR
560%
21%
Initial Cash Flow Cash Flow in One Year
- $2000
$13,200
$181,500
-$150,000
Ranking the projects by IRR would lead to
decision because the NPV of project A is $ and the NPV of project B is $ This means that project
projects being selected by the NPV and IRR rules.
(Round to the nearest dollar as needed.)
Searc
SAMSUNG
Cl
has the higher NPV, which results in
Time Remaining: 02:52:28
TEADX
S MASY
ANTON
Next
6:01 PM
Nutrition Fac
leur Facts
Transcribed Image Text:Your boss hands you the following information about two mutually exclusive projects. She adds the following: "Our discount rate is 10% and both projects have IRRS over 20%. Unfortunately, we are unable to implement both, so we will go with project A since it has the highest IRR of the two." How would you respond? Give a supporting numerical analysis. Projects A B Cost of Capital 10% 10% IRR 560% 21% Initial Cash Flow Cash Flow in One Year - $2000 $13,200 $181,500 -$150,000 Ranking the projects by IRR would lead to decision because the NPV of project A is $ and the NPV of project B is $ This means that project projects being selected by the NPV and IRR rules. (Round to the nearest dollar as needed.) Searc SAMSUNG Cl has the higher NPV, which results in Time Remaining: 02:52:28 TEADX S MASY ANTON Next 6:01 PM Nutrition Fac leur Facts
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