Relative value of projects namely npv or irr

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Reference no: EM133112791

Paul Pogba, who plays football for Manchester United in the English Premier League, has been offered two football boot endorsements as per below.

Option 1 - a single payment of US$15 million now by Nike

Option 2 - US$7.5 million per year at the end of the next three years by Adidas

Estimated cost of capital is 8.5%

a. Which offer is most attractive? Please analyze both offers using the NPV and IRRmethods.

b. Which is the most reliable method of analyzing the relative value of projects namely NPVor IRR? Please explain your reasoning.

Reference no: EM133112791

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