Question

4. Please solve in Excel; round to 3 decimal places:

YEAR	CASHFLOW PROJECT A		CASHFLOW PROJECT B
0	($105,000.00)		($105,000.00)
1	$54,000.00		$21,000.00
2	$45,000.00		$35,000.00
3	$25,000.00		$45,000.00
4	$15,000.00		$60,000.00

Hurdle rate =15%

a. What is the IRR for Project A (solve in Excel)?

b. What is the IRR for Project B (solve in Excel)?

c. These projects are mutually exclusive. Which one should you select and why?

Answer 1

Answer

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