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Garage, Inc., has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 $ 29,700 $ 29,700 1 15,100 4,650

Garage, Inc., has identified the following two mutually exclusive projects:
Year Cash Flow (A) Cash Flow (B)
0 $ 29,700 $ 29,700
1 15,100 4,650
2 13,000 10,150
3 9,550 15,900
4 5,450 17,500
a-1

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

IRR
Project A %
Project B %
a-2

Using the IRR decision rule, which project should the company accept?

Project A
Project B
a-3 Is this decision necessarily correct?
Yes
No
b-1

If the required return is 12 percent, what is the NPV for each of these projects?(Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

NPV
Project A $
Project B $
b-2 Which project will the company choose if it applies the NPV decision rule?
Project A
Project B
c.

At what discount rate would the company be indifferent between these two projects?(Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Discount rate

%

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