Calculate the irr of the projects

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Reference no: EM131513490

Consider the following two mutually exclusive projects:

Year Cash Flow A Cash Flow B

0 -300 000 -40,000

1 20 000 19 000

2 50 000 12 000

3 50 000 18 000

4 390 000 10 500

Assume your require a 10 percent return on your investment. Suppose you calculate the IRR of the projects and find the following: IRRA = 16.2% and IRR B = 19.55%. If you apply the IRR criterion, which investment will you choose? Why? No calculations required.

Reference no: EM131513490

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