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Consider the following cash flows on two mutually exclusive projects for the Bahamas Recreation Corporation (BRC). Both projects require an annual return of 18 percent.
| Consider the following cash flows on two mutually exclusive projects for the Bahamas Recreation Corporation (BRC). Both projects require an annual return of 18 percent. |
| Year | Deepwater Fishing | New Submarine Ride | ||||
| 0 | $ | 1,035,000 | $ | 2,020,000 | ||
| 1 | 455,000 | 1,070,000 | ||||
| 2 | 578,000 | 885,000 | ||||
| 3 | 505,000 | 920,000 | ||||
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| a-1. | Compute 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.) |
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