Problem 8.10 – Cash Flow (A) & Cash Flow (B), Two Mutually Exclusive Projects

Essentials of Corporate Finance

Ross, Westerfield, and Jordan

10th Edition and 11th Edition

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Difficulty – Medium

Determine the IRR of projects A and B, then calculate the NPV of each project. Evaluate the range of discount rates whereby A is preferred and the range of discount rates whereby B is preferred. Finally, find the discount rate where you would be indifferent between the two projects.

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