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Author Question: Bernhard Stroh is the Master Brewer at the Lion's Head Brewery. Bernhard has the approval to brew a ... (Read 62 times)

james9437

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on: Apr 25, 2021
Bernhard Stroh is the Master Brewer at the Lion's Head Brewery. Bernhard has the approval to brew a new beer, but can't decide which: 1) a wheat beer; or 2) a pale ale. Both beers require an initial investment of $1,000,000. The operating cash flows for each project are shown in the table. Lion's Head shareholders required a rate of return of 10%. The Wheat project has an IRR of 15.36% and the Ale project has an IRR of 15.89%. Which project should Bernhard choose (and why)?

YearWheatAle
0-1,000,000-1,000,000
1200,000900,000
21,100,000300,000

◦ Choose the Ale project because its IRR is greater.
◦ Choose the Ale because its NPV is higher.
◦ Choose the Wheat because its NPV is higher.
◦ Choose the Wheat because it generates more operating cash flows.
◦ Choose either because they both have the same NPV.
Corporate Finance Online ¦ Eakins, McNally ¦ 2nd Edition
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Marked as best answer by james9437 on Apr 25, 2021

izzat

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Reply #1 on: Apr 25, 2021
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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james9437

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Reply 2 on: Apr 25, 2021
YES! Correct, THANKS for helping me on my review

alvinum

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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