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Incremental irr rule to make the correct decision

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Reference no: EM132286055

Agglomerated Products Incorporated (API) is considering two mutually exclusive projects. Project A will require an investment of $20 million today, and will return $75 million at the end of 10 years (a one-time cash flow). Project B will cost $15 million today, but will return 3 million in EACH of the next 10 years.

Assuming API's weighted average cost of capital is 12 percent, use the incremental IRR rule to make the correct decision.

Reference no: EM132286055

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