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Question 4 20 pts Use the information in the table and the graph to answer the question. Cash Flow Project 1 Year Project 2 -please answer

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Answer #1

C = 17.40% and D = 20.56%

Based on the graph above, points C and D represent discount rate (or WACC) for the two projects where there NPV is zero.

So, we need to compute IRR for both projects.

A В C D 1 Cash Flow 2 Year Project 1 Project 2 ($22) ($47) 0 $9 $20 $12 $20 2 $11 $25 6 7 8 WACC 10% 9 IRR 20.56% 17.40% 10 PA В C 1 Cash Flow 2 Year Project 1 Project 2 3 0 -22 -47 4 1 9 20 5 2 12 20 6 3 11 25 7 8 WACC 9 IRR 0.1 =IRR(B3:B6) =IRR(C3:

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