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Bruin, Incorporated, has identified the following two mutually exclusive projects: Year Cash Flow ( A ) Cash Flow ( B ) 0 $ 2 8
Bruin, Incorporated, has identified the following two mutually exclusive projects:
Year Cash Flow A Cash Flow B
$ $
a
What is the IRR for each of these projects? Do not round intermediate calculations and enter your answers as a percent rounded to decimal places, eg
a
Using the IRR decision rule, which project should the company accept?
multiple choice
Project A
Project B
a Is this decision necessarily correct?
multiple choice
Yes
No
b
If the required return is percent, what is the NPV for each of these projects? Do not round intermediate calculations and round your answers to decimal places, eg
b Which project will the company choose if it applies the NPV decision rule?
multiple choice
Project A
Project B
c
At what discount rate would the company be indifferent between these two projects?
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