Parkallen Inc. has identified the following two mutually exclusive projects:

Year	Cash Flow (A)		Cash Flow (B)
0	$	38,450			$	38,450
1		17,900				7,900
2		16,080				13,400
3		12,980				18,800
4		8,880				21,120

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?

multiple choice 1

Project A Correct

Project B

a-3. Is this decision necessarily correct?

multiple choice 2

Yes

No Correct

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?

multiple choice 3

Project A

Project B Correct

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 15.45 Numeric Response 5.Edit Unavailable. 15.45 correct.%