Mr. Cyrus Clops, the president of Giant Enterprises, has to make a choice between two possible investments Project C0 C1 C2 C3 C4 IRR A -450 250 300 208 250 43% B -225 120 179 200 150 57% Mr. Clops is tempted to take B, which has the higher IRR. Show him how to adapt the IRR rule to choose the best project Multiple Choice WIn this case project B has a higher IRR than project A. However, project B is half the size of project A. Mr. Clops can compute the incremental IRR (IIRR). Mr. Clops should take project A when the discount rate is less thant the IIRR= 7% WIn this case project B has a higher IRR than project A. However, project B is half the size of project A. Mr. Clops can compute the incremental IRR (IIRR). Mr. Clops should take project A when the discount rate is less thant the IIRR= 25.4% WIn this case project B has a higher IRR than project A. However, project B is half the size of project A. Mr. Clops can compute the incremental IRR (IIRR). Mr. Clops should take project A when the discount rate is more thant the IIRR= 7%, and less than 43% WIn this case project B has a higher IRR than project A. However, project B is half the size of project A. Mr. Clops can compute the incremental IRR (IIRR). Mr. Clops should take project A when the discount rate is more thant the IIRR= 25.4% and less than 43% WIn this case project B has a higher IRR than project A. However, project B is half the size of project A. Mr. Clops can compute the incremental IRR (IIRR). Mr. Clops should take project A when the discount rate is more thant the IIRR= 25.4% and less than 57%

Mr. Cyrus Clops, the president of Giant Enterprises, has to make a choice between two possible investments Project C 0 C 1 C 2 C 3 C 4 IRR A -450 250 300 208 250 43% B -225 120 179 200 150 57% Mr....

Mr. Cyrus Clops, the president of Giant Enterprises, has to make a choice between two possible investments

Mr. Clops is tempted to take B, which has the higher IRR.

Show him how to adapt the IRR rule to choose the best project

Multiple Choice

WIn this case project B has a higher IRR than project A. However, project B is half the size of project A. Mr. Clops can compute the incremental IRR (IIRR). Mr. Clops should take project A when the discount rate is less thant the IIRR= 7%

WIn this case project B has a higher IRR than project A. However, project B is half the size of project A. Mr. Clops can compute the incremental IRR (IIRR). Mr. Clops should take project A when the discount rate is less thant the IIRR= 25.4%

WIn this case project B has a higher IRR than project A. However, project B is half the size of project A. Mr. Clops can compute the incremental IRR (IIRR). Mr. Clops should take project A when the discount rate is more thant the IIRR= 7%, and less than 43%

WIn this case project B has a higher IRR than project A. However, project B is half the size of project A. Mr. Clops can compute the incremental IRR (IIRR). Mr. Clops should take project A when the discount rate is more thant the IIRR= 25.4% and less than 43%

WIn this case project B has a higher IRR than project A. However, project B is half the size of project A. Mr. Clops can compute the incremental IRR (IIRR). Mr. Clops should take project A when the discount rate is more thant the IIRR= 25.4% and less than 57%

Jun 07, 2022