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The Winston Co. is considering two mutually exclusive projects with the following cash flows:                           &nbs

The Winston Co. is considering two mutually exclusive projects with the following cash flows:

                                                                        Project A               Project B

                                    Year                         Cash Flow             Cash Flow

                                       0                              -$75,000               -$60,000

                                       1                              $30,000                $25,000

                                       2                              $35,000                $30,000

                                       3                              $35,000                $25,000

           B-1 what is the IRR of project A?

           B-2 What is the IRR of project B?

           B-3 Based on the IRR rule, which project should be accepted and why?

           B-4 At what required rate of return will the company be indifferent between the two projects?

B-5 If Winston company has a required rate of return of 10%, which project (if any) should it accept and why?

B-6 If the company has a required rate of return of 15%, which project (if any) should it accept and why?

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