Consider the two mutually exlusive investments: Investments cash flow in year Y
ID: 2624238 • Letter: C
Question
Consider the two mutually exlusive investments:
Investments cash flow in year Y z
1 100 700
2 600 700
3 600 700
Cost 800 1,500
(a.) Determine each investment's IRR
(b) Using a hurdle rate of 8 percent determine each investment's NPV
(c.) Which investment is the most desireable? Why?
Show how your got answer,
Explanation / Answer
a)Let IRR BE
a)Let IRR BE