Project 1: NPV 13,941 IRR: 17.66% Project 2; NPV 31,261 IRR: 28.45% The questions is : Is it correct to use the IRR rule for project appraisal in this case? Why or why not? What is the NPV of this project? What is the IRR for this project? Is itcorrect to use the IRR rule for project appraisal in this case? Why or why

As per NPV rule select the project with higher positive NPV

Answered: Project 1: NPV 13,941 IRR: 17.66%…

Project 1: NPV 13,941 IRR: 17.66% Project 2; NPV 31,261 IRR: 28.45% The questions is : Is it correct to use the IRR rule for project appraisal in this case? Why or why not?

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter10: The Basics Of Capital Budgeting: Evaluating Cash Flows

Section10.5: Modified Internal Rate Of Return (mirr)

Problem 4ST

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

Project 1: NPV 13,941 IRR: 17.66%

Project 2; NPV 31,261 IRR: 28.45%

The questions is : Is it correct to use the IRR rule for project appraisal in this case? Why or why not?

What is the NPV of this project? What is the IRR for this project? Is it
correct to use the IRR rule for project appraisal in this case? Why or why

Definition Definition Calculation used to evaluate the investment and financing decisions that involve cash flows occurring over multiple periods. NPV is calculated as the difference between the present value of cash inflow and cash outflow. NPV is used for capital budgeting and investment planning as well as to compare similar investment alternatives.

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