Question: mary inc is considering mutually exclusive projects a and b...
Question details
Mary Inc. is considering mutually exclusive Projects A and B,
whose cash flows are shown below. If the decision is made by
choosing the project with the higher IRR, will there be any value
loss due to the IRR-based decision? If there is a loss, how much
value will be forgone? The WACC is assumed to be 9.5%.
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