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how is the computation of IRR Quantitative Problem: Bellinger Industries is considering two projects for inclusion in its capital budget, and you have been asked

image text in transcribedhow is the computation of IRR

Quantitative Problem: Bellinger Industries is considering two projects for inclusion in its capital budget, and you have been asked to do the analysis. Both projects' after-tax cash flows are shown on the time line below. Depreciation, salvage values, net operating working capital requirements, and tax effects are all included in these cash flows. Both projects have 4-year lives, and they have risk characteristics similar to the firm's average project. Bellinger's WACC is 10%. 2 =!!!!! 600 380 200 315 What is Project A's IRR? Do not round intermediate calculations. Round your answer to two decimal places. Project A -1,100 Project B -1,100 % 3 % 270 420 340 790 What is Project B's IRR? Do not round intermediate calculations. Round your answer to two decimal places. If the projects were independent, which project(s) would be accepted according to the IRR method? Both projects A and B If the projects were mutually exclusive, which project(s) would be accepted according to the IRR method? Project A

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