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The following two projects are mutually exclusive. Based on NPV, what project should the company choose to invest in? Assume each has a WACC of 5%.

Time Period    Cash Flow for Project 1          Cash Flow for Project 2

0                                  -2200                                       -1000

1                                  500                                          500

2                                  400                                          500

3                                  500                                          600

4                                  1000                                        700

5                                  2000                                        800

2. Calculate the IRR of the following project:

Time Period                Cash Flow

0                                  -1000

1                                  200 

2                                  300

3                                  500

4                                  300

5                                  2000

 

Financial Management, Finance

  • Category:- Financial Management
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