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Consider two mutually exclusive R&D projects that Savage Tech is considering. Assume the discount rate for both projects is 13 percent. Project Server CPU 13
Consider two mutually exclusive R\&D projects that Savage Tech is considering. Assume the discount rate for both projects is 13 percent. Project Server CPU 13 micron processing project A: By shrinking the die size to 13 micron, the company will be able to offer server CPU chips with lower power consumption and heat generation, meaning faster CPUs. Project New telecom chip project B: Entry into this industry will require introduction of a new chip for cell phones. The know-how will require a large amount of up-front capital, but success of the project will lead to large cash flows later on. Complete the following table: (Do not round intermediate calculations. Enter the IRR as a percent. Round your profitability index (PI) answers to 3 decimal places, e.g., 32.161, and other answers to 2 decimal places, e.g., 32.16.)
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