Corporate finance core principles and applications 4th edition by Stephen Ross

Question 8 and 9

Calculating IRR Compute the internal rate of return for the cash fows of the following two priects CASH FLOWS ($) YEAR PROJECT A PROJECT B $5,200 1,800 3,200 2,200 $3,600 1,300 2,100 1,800 9. Calculating Profitability Index Bill plans to open a self-serve grooming center in a storefront The grooming equipment will cost $185,000. Bilexpects aftertax cash inflows of $62,000 annualy for seven years, after which he plans to scrap the equipment and retire to the beaches of Nevis. The fit cash inflow occurs at the end of the first year. Assume the required return is 15 percent What project's PI? Should it be accepted? s the