Question
Consider the following cash flows of two mutually exclusive projects for Tokyo Rubber Company. Assume the discount rate for both projects is 10 percent. Year
| Consider the following cash flows of two mutually exclusive projects for Tokyo Rubber Company. Assume the discount rate for both projects is 10 percent. |
| Year | Dry Prepreg | Solvent Prepreg | ||||
| 0 | $ | 1,830,000 | $ | 815,000 | ||
| 1 | 1,113,000 | 440,000 | ||||
| 2 | 926,000 | 730,000 | ||||
| 3 | 763,000 | 416,000 | ||||
| a. | What is the payback period for both projects? (Do not round intermediate calculations. Round your answers to 2 decimal places, e.g., 32.16.) |
| b. | What is the NPV for both projects? (Do not round intermediate calculations. Round your answers to 2 decimal places, e.g., 32.16.) |
| c. | What is the IRR for both projects? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) |
| d. | Calculate the incremental IRR for the cash flows. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
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Financial Accounting
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
IFRS 3rd edition
978-1118978085
