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Mahjong, Inc., has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 $36,200 $36,200 1 18,700 6,300 2 14,200
Mahjong, Inc., has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 $36,200 $36,200 1 18,700 6,300 2 14,200 12,800 3 11,700 19,300 4 8,700 23,300 Required: (a) What is the IRR for Project A? (b) What is the IRR for Project B? (c) If the required return is 10 percent, what is the NPV for Project A? (d) If the required return is 10 percent, what is the NPV for Project B? (e) At what discount rate would the company be indifferent between these two projects?
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