Reading 44, cfa material, Q13. Doubt

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vparthas's picture

Hi,
In this question the cashflows for 2 different projects are given and we need to find the rate at which the NPV is same for both the projects.

How do you solve for this?
Would appreciate your help.

Thanks

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cpk123's picture

at each time point do a diff of cashflows

Proj 1 - Proj 2 at each year level.

then find the IRR of the combined (Proj1 - Proj2) cashflows.

CP

vparthas's picture

thanks!!

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