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Reece Company is presented with the following two mutually exclusive projects. The required return for both projects is 13 percent. Year Project M Project N
Reece Company is presented with the following two mutually exclusive projects. The required return for both projects is 13 percent.
Year | Project M | Project N | ||||
0 | $ | 135,000 | $ | 370,000 | ||
1 | 65,000 | 145,000 | ||||
2 | 83,000 | 195,000 | ||||
3 | 74,000 | 130,000 | ||||
4 | 60,000 | 125,000 | ||||
a. What is the IRR for each project? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
IRR | ||
Project M | % | |
Project N | % | |
b. What is the NPV for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
NPV | ||
Project M | $ | |
Project N | $ | |
c. Which, if either, of the projects should the company accept?
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