1) What is the IRR of the following set of cash flows? (Round your answer to 2 decimal places. (e.g., 32.16))

Year	Cash Flow
0	$	16,500
1		7,200
2		8,500
3		7,000

2) Garage, Inc., has identified the following two mutually exclusive projects:

Year	Cash Flow (A)				Cash Flow (B)
0	$	28,600			$	28,600
1		14,000				4,100
2		11,900				9,600
3		9,000				14,800
4		4,900				16,400

a-1	What is the IRR for each of these projects? (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16))

	IRR
Project A	%
Project B	%

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 10 percent, what is the NPV for each of these projects? (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16))

	NPV
Project A	$
Project B	$

b-2

Which project will the company choose if it applies the NPV decision rule?

	Project A
	Project B

c.	At what discount rate would the company be indifferent between these two projects? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Discount rate

%