Homework SourseConsider projects A and B Cash Flows dollars a Calculate IRR
Consider projects A and B:
Cash Flows (dollars)
a. Calculate IRRs for A and B. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)
| Cash Flows (dollars) | ||||
| Project | C0 | C1 | C2 | NPV at 10% |
| A | ?39,000 | 28,200 | 28,200 | +$9,942 |
| B | ?59,000 | 42,000 | 42,000 | +13,893 |
Solution
Use IRR function in Excel
IRR of A = 28.55%
IRR of B = 27.17%
| Cash flows | Year |
| (39,000.00) | 0 |
| 28,200.000 | 1 |
| 28,200.000 | 2 |
