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Part D: What is one discount rate where I would be indifferent between A and B? Please write down the formula to solve this to
Part D: What is one discount rate where I would be indifferent between A and B? Please write down the formula to solve this to get credit a) 5% b) 6.59% c) 8.57% d) 14.79% Problem 11: Cash flows for projects A and B are as follows, the required rate of return is 12%: Time Project A Project B 0 -$2,000 $2,300 1 $500 $300 2 $650 $700 3 $900 $950 4 $1,200 $1,900 Part A: What is the payback period for each project? Part B: What is NPV for each project? Part E: Which project should be accepted if A and B are mutually exclusive and the required rate of return is 5%? 15%? Why? Part C: Find the IRR for each project. Please write down the formula to solve this to get credit a) 10.27% b) 12.73% c) 19.26% d) 18.26% e)20%
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