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Consider the cash flows for the investment projects given in Table below. a. Assume that the MARR is 10%. Suppose A, B, and C are
Consider the cash flows for the investment projects given in Table below. a. Assume that the MARR is 10%. Suppose A, B, and C are mutually exclusive projects. Which project would be selected on the basis of the IRR criterion? (ROR analysis on incremental CF). b. On the basis of the IRR, would you accept independent project D at MARR = 12%? year NCF A NCF B NCF C NCF D 0 $2,500 -$835 1 -$4,250 $3,200 $2,850 $800 -$4,250 $2,850 $2,900 2 -$4,850 $2,100 $2,100 $2,100 $2,100 -$835 3 $1,050 -$835 4 $300 $500 -$835 Consider the cash flows for the investment projects given in Table below. a. Assume that the MARR is 10%. Suppose A, B, and C are mutually exclusive projects. Which project would be selected on the basis of the IRR criterion? (ROR analysis on incremental CF). b. On the basis of the IRR, would you accept independent project D at MARR = 12%? year NCF A NCF B NCF C NCF D 0 $2,500 -$835 1 -$4,250 $3,200 $2,850 $800 -$4,250 $2,850 $2,900 2 -$4,850 $2,100 $2,100 $2,100 $2,100 -$835 3 $1,050 -$835 4 $300 $500 -$835
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