Use the table for the question(s) below.
Consider the following two projects:

-The incremental IRR of Project B over Project A is closest to:
A) 12.6%
B) 23.3%
C) 1.7%
D) 17.3%

Question

Use the table for the question(s) below.
Consider the following two projects:
 
-The incremental IRR of Project B over Project A is closest to:
A) 12.6% 
B) 23.3% 
C) 1.7% 
D) 17.3%

Quizplus · Accepted Answer

A) First we need to find the incremental cash flows by taking cash flows of A - cash flows of B. IRR A - B CF₀ = (-100 - -73) = -27 CF₁ = (40 - 30) = 10 CF₂ = (50 - 30) = 20 CF₃ = (60 - 30) = 30 CF₄ = (0 - 30) = -30 Compute IRR = 12.63%

Use the Table for the Question(s) Below