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Parkallen Inc. has identified the following two mutually exclusive projects: Year 0 1 2 3 4 Cash Flow (A) -$36, 350 17, 120 15, 240
Parkallen Inc. has identified the following two mutually exclusive projects: Year 0 1 2 3 4 Cash Flow (A) -$36, 350 17, 120 15, 240 12,140 8,040 Cash Flow (B) -$36,350 7,100 12,600 18,000 20,160 a-1. What is the IRR for each of these projects? (Do not round intermediate calculations. Round the final answers to 2 decimal places.) Project A Project B IRR 19.021 18.08 a-2. Using the IRR decision rule, which project should the company accept? Project A O Project B a-3. Is this decision necessarily correct? O Yes O No 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? Project A 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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