Bruin, Inc., has identified the following two mutually exclusive projects:

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-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.)

	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 11 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.)

NPV Project A

NPV 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 enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)