Assignment
I. IRR method
a. Define the term internal rate of return (IRR). What is each project's IRR?
b. How is the IRR on a project related to the YTM on a bond?
c. According to IRR, which project(s) should be accepted if they are independent? Mutually exclusive?
II. Suppose the firm estimates its WACC to be 10%.
a. Should the WACC be used to evaluate all of its potential projects, even if they vary in risk? Explain.
b. Would the NPVs change if the WACC changed? Explain.
Format your assignment according to the following formatting requirements:
o The answer should be typed, using Times New Roman font (size 12), double spaced, with one-inch margins on all sides.
o The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
o Also include a reference page. The Citations and references must follow APA format. The reference page is not included in the required page length.