Question
Mahjong Incorporation has identified the following two mutually exclusive projects: YearCash Flow (A)Cash Flow (B) 0-$43,000-$43,000 123,0007,000 217,90013,800 312,40024,000 49,40026,000 a.What is the IRR for
Mahjong Incorporation has identified the following two mutually exclusive projects:
YearCash Flow (A)Cash Flow (B)
0-$43,000-$43,000
123,0007,000
217,90013,800
312,40024,000
49,40026,000
a.What is the IRR for each of these projects? Using the IRR decision rule, which project should the company accept? Is this decision necessarily correct?
b. If the required return is 11 percent, what is the NPV for each of these projects? Which project will the company choose if it applies the NPV decision rule?
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Personal Finance
Authors: Jeff Madura, Hardeep Singh Gill
3rd Canadian Edition
978-0133035575, 133035573, 978-0133970524, 133970523, 978-0134040042
