a-1 Compute the IRR for both projects.(do not round intermediate calculations and enter answers as a percent rounded to 2 decimal places.)

deep water fishing ___% submarine ride___%

a-2 based on the IRR which project should you choose?

b-1 calculate the incremental IRR for the cash flows..(do not round intermediate calculations and enter answers as a percent rounded to 2 decimal places.)

incremental IRR ___%

b-2 based on the incremental IRR which project should you choose?

c-1 compute the NPV for both projects. .(do not round intermediate calculations and enter answers rounded to 2 decimal places.

deep water fishing ___ submarine ride ___

c-2 based on the NPV which project should you choose?

c-3 is the npv decision consistent with the incremental IRR rule?

Problem 5-11 NPV versus IRR Consider the following cash flows on two mutually exclusive projects for the Bahamas Recreation Corporation (BRC). Both projects require an annual return of 18 percent. Deepwater Fishing Year 0 New Submarine Ride $2,000,000 1,050,000 875,000 900,000 1,025,000 445,000 570,000 495,000 1 2 3