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Bruin, Incorporated, has identified the following two mutually exclusive projects: Year 0 Cash Flow (A) -$ 28,900 Cash Flow (B) -$ 28,900 1 14,300
Bruin, Incorporated, has identified the following two mutually exclusive projects: Year 0 Cash Flow (A) -$ 28,900 Cash Flow (B) -$ 28,900 1 14,300 4,250 2 12,200 9,750 15,100 16,700 3 4 9,150 5,050 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.) Project A Project B % % a- 2. Using the IRR decision rule, which project should the company accept? O Project A Project B a- m 3. Is this decision necessarily correct? Yes No b- If the required return is 10 percent, what is the NPV for each of these projects? (Do 1. not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Project A Project B b- 2. Which project will the company choose if it applies the NPV decision rule? O Project A O 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.) Discount rate %
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