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Bruin, Incorporated, has identified the following two mutually exclusive projects: Year o 1 2 3 4 Cash Flow (A) -$ 28,200 13,600 11,500 8,800 4,700
Bruin, Incorporated, has identified the following two mutually exclusive projects: Year o 1 2 3 4 Cash Flow (A) -$ 28,200 13,600 11,500 8,800 4,700 Cash Flow (B) -$ 28,200 3,900 9,400 14,400 16,000 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 O Project B a- 3. Is this decision necessarily correct? O Yes b- If the required return is 11 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- 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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