A company is analyzing two mutually exclusive projects, S and L, with the following cash flows:   0 1 2 3 4                         Project S -$1,000 $872.89 $250 $15 $5 Project L -$1,000 $10 $240 $400 $854.72 The company's WACC is 9.5%. What is the IRR of the better project? (Hint: The better project may or may not be the one with the higher IRR.) Round your answer to two decimal places.  %

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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A company is analyzing two mutually exclusive projects, S and L, with the following cash flows:

  0 1 2 3 4
           
           
Project S -$1,000 $872.89 $250 $15 $5
Project L -$1,000 $10 $240 $400 $854.72

The company's WACC is 9.5%. What is the IRR of the better project? (Hint: The better project may or may not be the one with the higher IRR.) Round your answer to two decimal places.

 %

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