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Npv method versus irr method

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Reference no: EM132406811

Flint fruits is considering two equally risky, mutually exclusive projects, Project A and B, that have the following cash flows:

Project A: Year 0: -100,000/Year 1: 60,000/Year 2: 25,000/ Year 3: 60,000/ Year 4: 40,000

Project B: Year 0: -100,000/ Year 1: 30 000/ Year 2: 15,000/ Year 3: 80,000/ Year 4: 65,000

What is the cost of capital that would make these two projects having the same NPV values?

Carefully discuss why this cost of capital that would make two projects have the same NPV values would influence your decision to take project A or project B based on NPV method versus IRR method?

Reference no: EM132406811

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