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Consider the following cash flows of two mutually exclusive projects for Spartan Rubber Company. Assume the discount rate for both projects is 9 percent. Year


Consider the following cash flows of two mutually exclusive projects for Spartan Rubber Company. Assume the discount rate for both projects is 9 percent.

Year Dry Prepreg Solvent Prepreg
0 –$ 1,850,000
–$ 825,000
1
1,115,000

450,000
2
930,000

750,000
3
765,000

420,000


a. What is the payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)


Payback period
Dry Prepreg years
Solvent Prepreg years


b. What is the NPV for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)


NPV
Dry Prepreg $
Solvent Prepreg $


c. What is the IRR for each project? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)


IRR
Dry Prepreg %
Solvent Prepreg %


d. Calculate the incremental IRR for the cash flows. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Incremental IRR             %

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