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You are evaluating the following two projects: Project Y Year-End Cash Flows ($ thousands) 0 1 2 -35 23 22 - 85 42 63 Use
You are evaluating the following two projects: Project Y Year-End Cash Flows ($ thousands) 0 1 2 -35 23 22 - 85 42 63 Use the incremental IRR to determine the range of discount rates for which each project is optimal to undertake. Note that you should also include the range in which it does not make sense to take either project. Fill in the incremental cash flows in the bottom row of the chart: (Round to the nearest integer.) Year-End Cash Flows ($ thousands) Project 0 1 2 X -35 23 22 Y - 85 42 63 Incremental Cash Flow Find the incremental IRR and the IRR for the projects. Fill in the IRR for Project X, Project Y and the incremental IRR: (Round to two decimal places.) Year-End Cash Flows ($ thousands) 0 1 2 Project X - 35 23 22 IRR % % Y -85 42 63 Y-X -50 19 41 % Use the incremental IRR rule to decide between the two projects. (Select from the drop-down menus and round to two decimal places.) % and Project should be taken on for discount rates above %. Neither project should be Project V should be taken on for discount rates below taken on for discount rates above %
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