Bellinger Industries is considering two projects for inclusion in its capital budget, and you have been asked to do the analysis. Both projects' after-tax cash flows are shown on the time line below. Depreciation, salvage values, net operating working capital requirements, and tax effects are all included in these cash flows. Both projects have 4-year lives, and they have risk characteristics similar to the firm's average project. Bellinger's WACC is 11%. 0 1 2 3 4 Project A -1,050 600 360 300 290 Project B -1,050 200 295 450 740 What is Project A’s IRR? Do not round intermediate calculations. Round your answer to two decimal places. % Hide Feedback Incorrect Check My Work Feedback Review the IRR equation. The solution for IRR is a percentage rate not a dollar value. The IRR calculation is not dependent on the firm's WACC. Don't forget the minus sign for the Year 0 cash flow. Don't forget to include the Year 0 cash flow in your calculation. What is Project B's IRR? Do not round intermediate calculations. Round your answer to two decimal places. %
Bellinger Industries is considering two projects for inclusion in its capital budget, and you have been asked to do the analysis. Both projects' after-tax cash flows are shown on the time line below. Depreciation, salvage values, net operating working capital requirements, and tax effects are all included in these cash flows. Both projects have 4-year lives, and they have risk characteristics similar to the firm's average project. Bellinger's WACC is 11%.
| 0 | 1 | 2 | 3 | 4 | ||||||
| Project A | -1,050 | 600 | 360 | 300 | 290 | |||||
| Project B | -1,050 | 200 | 295 | 450 | 740 |
What is Project A’s
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Review the IRR equation.
The solution for IRR is a percentage rate not a dollar value.
The IRR calculation is not dependent on the firm's WACC.
Don't forget the minus sign for the Year 0 cash flow.
Don't forget to include the Year 0 cash flow in your calculation.
What is Project B's IRR? Do not round intermediate calculations. Round your answer to two decimal places.
%
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