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Zayas, LLC, has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) $64,000 40,000 34,000 23,000 14,800 -S64,000 26,600 30,600
Zayas, LLC, has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) $64,000 40,000 34,000 23,000 14,800 -S64,000 26,600 30,600 36,000 24,600 a. What is the IRR for each of these projects? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Internal rate of return Project A Project B If you apply the IRR decision rule, which project should the company accept? (Click to select) # b. Assume the required return is 15 percent. What is the NPV for each of these projects? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Net present value Project A Project B Which project will you choose if you apply the NPV decision rule? (Click to select) c. Over what range of discount rates would you choose Project A? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Project A Over what range of discount rates would you choose Project B? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Project B At what discount rate would you be indifferent between these two projects? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Discount rate |(Click to select) #) % (Click to select)
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