What is the IRR of the better project

Assignment Help Financial Management

Reference no: EM131611287

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

0 1 2 3 4

Project S -$1,000 $866.71 $260 $10 $15

Project L -$1,000 $10 $240 $380 $856.32

The company's WACC is 10.0%. 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.

Reference no: EM131611287

Questions Cloud

How much did firm add to its retained earnings : How much did the firm add to its retained earnings?

Present value of set of cash flows at interest rate : What is the present value of the following set of cash flows at an interest rate of 6%:

What is its after-tax cost of debt : What is Avicorp's pre-tax cost of debt? If Avicorp faces a 40% tax rate, what is its after-tax cost of debt?

What is internal rate of return : You buy a new piece of equipment for $19,989, and you receive a cash inflow of $2,800 per year for 11 years. What is the internal rate of return?

What is the IRR of the better project : A company is analyzing two mutually exclusive projects, The company's WACC is 10.0%. What is the IRR of the better project?

What are earnings before interest and taxes under best-case : What are the earnings before interest and taxes under the best-case scenario?

What is the implied price per share of this funding round : What is the implied price per share of this funding round? What will the value of the whole firm be after this investment (the post-money valuation)?

What is net present value of the project : A project has an initial cost of $480,000, projected cash inflows of $311,500, cash costs of $214,650, What is the net present value of the project?

Investor rate of return in us terms : After transferring the funds back to the United States, what was the investor’s return on her $310,000?

User Account

All Pages