b) Calculate the NPV and the IRR of Project A using the single future value calculated in the previous step and the initial outlay. It is easy to verify that you will get the same NPV as in your original calculation only if you use the required return as the reinvestment rate in the previous step.

9-12. Bruin, Inc., has identified the following two mutually exclusive projects, Project A and Project B: Year Cash Flow (A) Cash Flow (B) 0-$37,500-$37,500 1 $17,300 $5,700 2 $16,200 $12.900 3 $13.800 $16,300 4 $7,600 $27,500 a) What is the IRR for each of these projects? Using the IRR decision rule, which project should the company accept? Is the decision rule necessarily correct? b) If the required return is 11 percent, what is the NPV for each of these projects? Which project will the company choose if it applies the NPV decision rule? 9-C14. It is sometimes stated that the net present value approach assumes reinvestment of the intermediate cash flows at the required return." To answer, refer to the previous question, 9-12. b) Calculate the NPV and the IRR of Project A using the single future value calculated in the previous step and the initial outlay. It is easy to verify that you will get the same NPV as in your original calculation only if you use the required return as the reinvestment rate in the previous step