Piercy, LLC, has identified the following two mutually exclusive projects:YearCash Flow (A) Cash Flow (B)-$56,00032,00026,00019,00013,200-$56,00019,40023,40028,00025,40013.4.a-1. What is the IRR for each of these projects? (Do not round intermediate calculations and enteryour answers as a percent rounded to 2 decimal places, e.g., 32.16.)a-2. If you apply the IRR decision rule, which project should the company accept?b-1. Assume the required return is 12 percent. What is the NPV for each of these projects? (Do notround intermediate calculations and round your answers to 2 decimal places, e.g.., 32.16.)b-2. Which project will you choose of you apply the NPV decision rule?c-1. Over what range of discount rates would you choose Project A? (Do not round intermediatecalculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)c-2. Over what range of discount rates would you choose Project B? (Do not round intermediatecalculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)At what discount rate would you be indifferent between these two projects? (Do not roundintermediate calculations and enter your answer as a percent rounded to 2 decimal places,e.g., 32.16.)d.

Introduction: Net present value & IRR are the capital budgeting techniques used by the…

1. What is the IRR for each of these projects? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) 2. If you apply the IRR decision rule, which project should the company accept? 1. Assume the required return is 12 percent. What is the NPV for each of these projects? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) -2. Which project will you choose of you apply the NPV decision rule?

1. What is the IRR for each of these projects? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) 2. If you apply the IRR decision rule, which project should the company accept? 1. Assume the required return is 12 percent. What is the NPV for each of these projects? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) -2. Which project will you choose of you apply the NPV decision rule?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Bruin, Incorporated has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 -$ 41,300 1 19, 100 2 17,800 3 15, 200 4 8,400 -$ 41,300 6,300 14, 200 17,900 30,300 a-1. What is the IRR for each of these projects? Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. a-2. If you apply the IRR decision rule, which project should the company accept? b-1. Assume the required return is 11 percent. What is the NPV for each of these projects? a-1. Project A Project B a-2. Project acceptance b-1. Project A Project B b-2. Project acceptance Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. b-2. Which project will you choose if you apply the NPV decision rule? % %
Bruin, Inc., has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) -$29,700 -$29,700 15,100 4,650 13,000 10,150 9,550 15,900 5,450 17,500 0123 + 4 a-1 What is the IRR for each of these projects? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Project A Project B a-2 Using the IRR decision rule, which project should the company accept? Project A O Project B % % 2 lo this decisi orrect
Bruin, Incorporated, has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) B -$ 57,000 -$ 57,000 1 33,000 2 27,000 3 19,500 4 13,400 20,300 24,300 29,000 25,300 a-1. What is the IRR for each of these projects? Note: Do not round Intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., a-2. If you apply the IRR decision rule, which project should the company accept? b-1. Assume the required return is 13 percent. What Is the NPV for each of these projects? Note: Do not round Intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. b-2. Which project will you choose of you apply the NPV decision rule? c-1. Over what range of discount rates would you choose Project A? 32.16. Note: Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. c-2. Over what range of discount rates would you choose Project B? Note: Do not round…
Bruin, Incorporated, has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 −$ 28,000 −$ 28,000 1 13,400 3,800 2 11,300 9,300 3 8,700 14,200 4 4,600 15,800 a-1. What is the IRR for each of these projects? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b-1. If the required return is 10 percent, what is the NPV for each of these projects? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) c. At what discount rate would the company be indifferent between these two projects? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Bruin, Incorporated, has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 -$ 61,000 -$ 61,000 1 37,000 23,900 31,000 27,900 21,500 33,000 4 14,200 24,900 a-1. What is the IRR for each of these projects? Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. a-2. If you apply the IRR decision rule, which project should the company accept? b-1. Assume the required return is 12 percent. What is the NPV for each of these projects? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. b-2. Which project will you choose of you apply the NPV decision rule? c-1. Over what range of discount rates would you choose Project A? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. c-2. Over what range of discount rates would you choose Project B? Note: Do not round…
Bruin, Inc., has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 –$ 28,700 –$ 28,700 1 14,100 4,150 2 12,000 9,650 3 9,050 14,900 4 4,950 16,500 a-1 What is the IRR for each of these projects? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) a-2 Using the IRR decision rule, which project should the company accept? Project A Project B a-3 Is this decision necessarily correct? Yes No b-1 If the required return is 12 percent, what is the NPV for each of these projects? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b-2 Which project will the company choose if it applies the NPV decision rule? Project A Project B c.…
Bruin, Incorporated, has identified the following two mutually exclusive projects: Year Cash Flow (A) 0 -$ 54,000 1 30,000 2 24,000 18,000 12,800 3 4 Cash Flow (B) -$ 54,000 17,600 21,600 26,000 25,600 a-1. What is the IRR for each of these projects? Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. a-2. If you apply the IRR decision rule, which project should the company accept? b-1. Assume the required return is 14 percent. What is the NPV for each of these projects? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. b-2. Which project will you choose of you apply the NPV decision rule? c-1. Over what range of discount rates would you choose Project A? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. c-2. Over what range of discount rates would you choose Project B? Note: Do not round…
es Bruin, Incorporated, has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) -$ 58,000 -$ 58,000 34,000 21, 200 28,000 25,200 30,000 25, 200 0 1 1234 a-1. What is the IRR for each of these projects? Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. a-2. If you apply the IRR decision rule, which project should the company accept? b-1. Assume the required return is 14 percent. What is the NPV for each of these projects? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. b-2. Which project will you choose of you apply the NPV decision rule? c-1. Over what range of discount rates would you choose Project A? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. c-2. Over what range of discount rates would you choose Project B? Note: Do not round intermediate…
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