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Problem 5-11 NPV versus IRR Consider the following cash flows on two mutually exclusive projects for the Bahamas Recreation Corporation (BRC). Both projects require an

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Problem 5-11 NPV versus IRR Consider the following cash flows on two mutually exclusive projects for the Bahamas Recreation Corporation (BRC). Both projects require an annual return pf 18 percent. Deepwater Fishing Year 0 New Submarine Ride 82,030,000 1,080,000 890,000 930,000 1,040,000 460,000 582,000 510,000 1 2 3 a-1. Compute the IRR for both projects. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) % Deepwater Fishing Submarine Ride % a-2. Based on the IRR, which project should you choose? O Deepwater Fishing Submarine Ride b-1. Calculate the incremental IRR for the cash flows. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Incremental IRR % b-2. Based on the incremental IRR, which project should you choose? O Submarine Ride O Deepwater Fishing C-1. Compute the NPV for both projects. (Do not round Intermediate calculations and round your answers to 2 decimal places, e.g., 32.16 k ces Deepwater Fishing Submarine Ride c-2. Based on the NPV, which project should you choose? O Submarine Ride O Deepwater Fishing c-3. Is the NPV decision consistent with the incremental IRR rule? O No O Yes

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