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7. Consider two investments A and B with the sequences of cash flows given in the table below. 12 Click the icon to view the
7. Consider two investments A and B with the sequences of cash flows given in the table below. 12 Click the icon to view the cash flows for the projects. (a) Compute the IRR for each investment. The rate of return for Project A is %. (Round to one decimal place.) The rate of return for Project B is %. (Round to one decimal place.) (b) At MARR =15%, determine the acceptability of each project. Would you accept Project A? Choose the correct answer below. Yes No Would you accept Project B? Choose the correct answer below. Yes No (c) If A and B are mutually exclusive projects, which project would you select based on the rate of return on incremental investment at MARR =15% ? The rate of return on the incremental investment is %. (Round to one decimal place.) Which project would you select based on the rate of return on incremental investment at MARR =15% ? Choose the correct answer below. Project B Project A Net Cash Flow \begin{tabular}{|r|r|r|} \hline n & Project A & Project B \\ \hline 0 & $125,000 & $110,000 \\ 1 & 30,000 & 20,000 \\ 2 & 30,000 & 20,000 \\ 3 & 120,000 & 130,000 \\ \hline \end{tabular} 7. Consider two investments A and B with the sequences of cash flows given in the table below. 12 Click the icon to view the cash flows for the projects. (a) Compute the IRR for each investment. The rate of return for Project A is %. (Round to one decimal place.) The rate of return for Project B is %. (Round to one decimal place.) (b) At MARR =15%, determine the acceptability of each project. Would you accept Project A? Choose the correct answer below. Yes No Would you accept Project B? Choose the correct answer below. Yes No (c) If A and B are mutually exclusive projects, which project would you select based on the rate of return on incremental investment at MARR =15% ? The rate of return on the incremental investment is %. (Round to one decimal place.) Which project would you select based on the rate of return on incremental investment at MARR =15% ? Choose the correct answer below. Project B Project A Net Cash Flow \begin{tabular}{|r|r|r|} \hline n & Project A & Project B \\ \hline 0 & $125,000 & $110,000 \\ 1 & 30,000 & 20,000 \\ 2 & 30,000 & 20,000 \\ 3 & 120,000 & 130,000 \\ \hline \end{tabular}
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