Garage, Inc., has identified the following two mutually exclusive projects:Year-$ 29,10014,50012,4009,2505,150Cash Flow (A) Cash Flow (B)-$ 29,1004,3509,85015,30016,900a-1 What is the IRR for each of these projects? (Do not round intermediate calculations. Enter youranswers as a percent rounded to 2 decimal places, e.g., 32.16.)IRRProject A%Project B%a-2 Using the IRR decision rule, which project should the company accept?O Project AO Project Ba-3 Is this decision necessarily correct?YesNob-1 If the required return is 12 percent, what is the NPV for each of these projects? (Do not roundintermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)NPVProject A$Project B$b-2 Which project will the company choose if it applies the NPV decision rule?O Project AProject Bc. At what discount rate would the company be indifferent between these two projects? (Do not roundintermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g.,32.16.)Discount rate%eBook & ResourceseBook: 9.5. The Internal Rate of ReturnCheck my workO1234

When there is a conflict between the NPV and IRR. NPV rule will prevail.

Garage, Inc., has identified the following two mutually exclusive projects: Cash Flow (A) Cash Flow (B) -$ 29,100 14,500 12,400 9,250 5,150 Year 1 2 3 4 -$ 29,100 4,350 9,850 15,300 16,900 a-1 What is the IRR for each of these projects? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) IRR Project A % Project B %

Garage, Inc., has identified the following two mutually exclusive projects: Cash Flow (A) Cash Flow (B) -$ 29,100 14,500 12,400 9,250 5,150 Year 1 2 3 4 -$ 29,100 4,350 9,850 15,300 16,900 a-1 What is the IRR for each of these projects? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) IRR Project A % Project B %

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 −$ 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…
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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…
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