Question
Garage, Inc. has identified the following 2 mutually exclusive projects: Year Cash Flow A Cash Flow B 0 - $28,000 - $28,000 1 13,400 3,800
Garage, Inc. has identified the following 2 mutually exclusive projects:
| Year | Cash Flow A | Cash Flow B |
| 0 | - $28,000 | - $28,000 |
| 1 | 13,400 | 3,800 |
| 2 | 11,300 | 9,300 |
| 3 | 8,700 | 14,200 |
| 4 | 4,600 | 15,800 |
a. what is the IRR for each of these projects?
b. if the required return rate is 10%, what is the NPV for each of these projects
c. at what discount rate would the compamy be indifferent between these 2 projects?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Strategic Public Finance
Authors: Stephen Bailey
1st Edition
0333922212, 978-033392221
