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Bruin, Incorporated, has identified the following two mutually exclusive projects: Cash Flow (A) Cash Flow (B) -$ 29,400 -$29,400 14,800 4,500 12,700 10,000 9,400 5,300
Bruin, Incorporated, has identified the following two mutually exclusive projects: Cash Flow (A) Cash Flow (B) -$ 29,400 -$29,400 14,800 4,500 12,700 10,000 9,400 5,300 Year 0 1 2 3 4 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. 15,600 17,200 O Project A O Project B % % Using the IRR decision rule, which project should the company accept? a- 3. b- If the required return is 12 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- Is this decision necessarily correct? 2. Yes O No 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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