Problem:
A company is analyzing two mutually exclusive projects, S and L, with the following cash flows:
0 1 2 3 4
Project S -$1,000 $900 $250 $10 $10
Project L -$1,000 $0 $250 $$400 $800
The company's WACC is 10 percent. What is the IRR of the better project? (Hint: Note that the better project may or may not be the one with the higher IRR.)