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Romboski, LLC, has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 ?$ 65,000 ?$ 65,000 1 34,000 19,000

Romboski, LLC, has identified the following two mutually exclusive projects:

Year Cash Flow (A) Cash Flow (B)
0 ?$ 65,000 ?$ 65,000
1 34,000 19,000
2 27,000 25,000
3 21,000 29,000
4 17,000 34,000

Requirement 1:
(a)

What is the IRR for each of these projects? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

Internal rate of return
Project A %
Project B %

(b) If you apply the IRR decision rule, which project should the company accept?
(Click to select)Project AProject B

Requirement 2:
(a)

Assume the required return is 11 percent. What is the NPV for each of these projects? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).)

Net present value
Project A $
Project B $

(b) Which project will you choose if you apply the NPV decision rule?
(Click to select)Project BProject A

Requirement 3:
(a)

Over what range of discount rates would you choose Project A? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

Project A (Click to select)BelowAbove @ %

(b)

Over what range of discount rates would you choose Project B? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g.,32.16).)

Project B (Click to select)AboveBelow @ %

(c)

At what discount rate would you be indifferent between these two projects? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

Discount rate %

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