Year	Cash Flow
0	$	3,024
1		17,172
2		36,420
3		34,200
4		12,000

This problem is useful for testing the ability of financial calculators and computer software. Consider the above cash flows. The IRRs, from smallest to largest, are percent, percent, percent, and percent. (Hint: search between 20 percent and 70 percent.) (Round your answers to 2 decimal places. (e.g., 32.16))

2) Garage, Inc., has identified the following two mutually exclusive projects:

Year	Cash Flow (A)				Cash Flow (B)
0	$	28,600			$	28,600
1		14,000				4,100
2		11,900				9,600
3		9,000				14,800
4		4,900				16,400

a-1	What is the IRR for each of these projects? (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16))

	IRR
Project A	%
Project B	%

a-2

Using the IRR decision rule, which project should the company accept?

	Project A
	Project B

a-3

Is this decision necessarily correct?

	Yes
	No

b-1	If the required return is 10 percent, what is the NPV for each of these projects? (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16))

	NPV
Project A	$
Project B	$

b-2

Which project will the company choose if it applies the NPV decision rule?

	Project A
	Project B

c.	At what discount rate would the company be indifferent between these two projects? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Discount rate

%