Question
Mahjong, Inc., has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 $40,000 $40,000 1 19,300 5,700 2 14,800
Mahjong, Inc., has identified the following two mutually exclusive projects:
Year | Cash Flow (A) | Cash Flow (B) |
0 | $40,000 | $40,000 |
1 | 19,300 | 5,700 |
2 | 14,800 | 12,200 |
3 | 12,300 | 18,700 |
4 | 9,300 | 22,700 |
Required:
(a) What is the IRR for Project A? (17.78%, 17.44%, 16.42%, 16.08%, 16.93%)
(b) What is the IRR for Project B? (14.45%,14.88%,14.02%,13.73%,15.17%)
(c) If the required return is 8 percent, what is the NPV for Project A? (7158.9,6800.95,7373.67,6944.13,7516.84)
(d) If the required return is 8 percent, what is the NPV for Project B? (7267.15, 6903.79, 7485.16,7049.14, 7630.51)
(e) At what discount rate would the company be indifferent between these two projects? (8.31%,7.89%,8.06%,8.73%,8.56%)
Please select 1 from each bracket.
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