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Parkallen Inc. has identified the following two mutually exclusive projects: Year 0 1 2 Cash Flow (A) - $36, 875 17, 315 15, 450 12,350
Parkallen Inc. has identified the following two mutually exclusive projects: Year 0 1 2 Cash Flow (A) - $36, 875 17, 315 15, 450 12,350 8, 250 Cash Flow (B) - $36, 875 7, 300 12, 800 18, 200 20, 400 4 a-1. What is the IRR for each of these projects? (Do not round intermediate calculations. Round the final answers to 2 decimal places.) IRR % Project A Project B % a-2. Using the IRR decision rule, which project should the company accept? O Project A O Project B a-3. Is this decision necessarily correct? O Yes b-1. If the required return is 11%, what is the NPV for each of these projects? (Do not round intermediate calculations. Round the final answers to 2 decimal places. Omit $ sign in your response.) NPV $ Project A Project B $ b-2. Which project will the company choose if it applies the NPV decision rule? O Project A O Project B c. At what discount rate would the company be indifferent between these two projects? (Do not round intermediate calculations. Round the final answer to 2 decimal places.) Discount rate %
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