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Author Question: Two projects being considered by a firm are mutually exclusive and have the following projected cash ... (Read 54 times)

kaid0807

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on: Apr 25, 2021

Question 1

The underlying cause of ranking conflicts between the NPV and IRR methods is differing
◦ initial cost.
◦ costs of capital.
◦ cash flow timing.
◦ profitability indices.
◦ errors in calculating the discount rate.

Question 2

Two projects being considered by a firm are mutually exclusive and have the following projected cash flows:

YearProject AProject B
0-$100,000-$100,000
1$39,5000
2$39,5000
3$39,500$133,000
Which project(s) should be accepted?
◦ A, because it has a shorter payback period.
◦ B, because it has a higher IRR.
◦ Indifferent, because the projects have equal IRRs.
◦ Include both in the capital budget, since the sum of the cash inflows exceeds the initial investment in both cases.
◦ Choose neither, since their NPVs are negative.
Corporate Finance Online ¦ Eakins, McNally ¦ 2nd Edition
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Marked as best answer by kaid0807 on Apr 25, 2021

mammy1697

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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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kaid0807

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Reply 2 on: Apr 25, 2021
Great answer, keep it coming :)

softEldritch

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

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