What is the logic behind the IRR method? According to IRR, which project(s) should be accepted if they are independent? Mutually exclusive?How is the IRR on a project related to the YTM on a bond?
Case Study #2: Capital Budgeting 1. Define the term internal rate of return (IRR). What is each project’s IRR? 2. How is the IRR on a project related to the YTM on a bond? 3. What is the logic behind the IRR method? According to IRR, which project(s) should be accepted if they are independent? […]