Question
In: Finance
37. Bruin, Inc., has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash...
37. Bruin, Inc., has identified the following two mutually exclusive projects:
Year Cash Flow (A) Cash Flow (B)
0 $37,300 $37,300
1 19,660 7,180
2 15,170 13,680
3 12,660 20,160
4 9,660 24,160
a. What is the IRR for Project A?
|
b. What is the IRR for Project B? |
|
c. If the required return is 11 percent, what is the NPV for Project A? |
|
d. If the required return is 11 percent, what is the NPV for Project B? e. At what discount rate would the company be indifferent between these two projects? |
Solutions
jeff jeffy answered 1 year agoRelated Solutions
Bruin, Inc., has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow...
Bruin, Inc., has identified the following two mutually exclusive
projects:
Year
Cash Flow (A)
Cash Flow (B)
0
-37,500
-37,500
1
17,300
5,700
2
16,200
12,900
3
13,800
16,300
4
7,600
27,500
What is the IRR for each of these projects? Using the IRR
decision rule, which project should the company accept? Is this
decision necessarily correct?
If the required return is 11 percent, what is the NPV for each
of these projects? Which project will the company choose if...
Bruin, Inc., has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash...
Bruin, Inc., has identified the following two mutually
exclusive projects:
Year
Cash Flow (A)
Cash Flow (B)
0
–$36,200
–$36,200
1
18,700
6,300
2
14,200
12,800
3
11,700
19,300
4
8,700
23,300
a. What is the IRR for Project A?
b. What is the IRR for Project B?
c. If the required return is 10 percent, what
is the NPV for Project A?
d. If...
Bruin, Inc., has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash...
Bruin, Inc., has
identified the following two mutually exclusive projects:
Year
Cash Flow (A)
Cash Flow (B)
0
–$
28,000
–$
28,000
1
13,400
3,800
2
11,300
9,300
3
8,700
14,200
4
4,600
15,800
A) What is the IRR for each of these projects?
B) Using the IRR decision rule, which project should the company
accept?
C) Is this decision necessarily correct?
D) If the required return is 10 percent, what is the NPV for
each of these projects?...
Mahjong, Inc., has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow...
Mahjong, Inc., has identified the following two mutually
exclusive projects:
Year
Cash Flow
(A)
Cash Flow
(B)
0
–$37,400
–$37,400
1
19,750
7,300
2
15,270
13,800
3
12,750
20,270
4
9,750
24,270
Required:
(a)
What is the IRR for Project
A?
(Click to select)23.45%22.77%23.91%22.09%21.63%
(b)
What is the IRR for Project
B?
(Click to select)21.31%21.97%23.07%22.63%20.87%
(c)
If the required return is 10
percent, what is the NPV for...
Maple, Inc., has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow...
Maple, Inc., has identified the following two mutually exclusive
projects:
Year
Cash Flow (A)
Cash Flow (B)
0
–$
24,500
–$
24,500
1
12,300
3,700
2
13,200
10,100
3
10,500
14,600
4
12,900
25,000
Project A’s IRR equals ___________ and project B’s IRR equals
_______. Based on the IRR measures alone, you would choose project
_____?
Select one:
A. 35.01%; 24.57%; A
B. 35.01%; 24.57%; B
C. 35.01%; 29.48%; A
D. 35.01%; 29.48%; B
E. 29.48%; 24.57%; A
Garage, Inc., has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow...
Garage, Inc., has identified the following two mutually
exclusive projects:
Year Cash Flow (A) Cash Flow (B)
0 –$ 29,400 –$ 29,400
1 14,800 4,500
2 12,700 10,000
3 9,400 15,600
4 5,300 17,200
1. What is the IRR for each of these projects? (Do not round
intermediate calculations. Enter your answers as a percent rounded
to 2 decimal places, e.g., 32.16.)
IRR
Project A %
Project B %
2. Using the IRR decision rule, which project should the company...
Garage, Inc., has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash...
Garage, Inc., has identified the
following two mutually exclusive projects:
Year
Cash Flow (A)
Cash Flow (B)
0
–$
29,500
–$
29,500
1
14,900
4,550
2
12,800
10,050
3
9,450
15,700
4
5,350
17,300
a-1
What is the IRR for each of these projects? (Do not
round intermediate calculations. Enter your answers as a percent
rounded to 2 decimal places, e.g., 32.16.)
IRR
Project A
%
Project B
%
a-2
Using the IRR decision rule, which...
Garage, Inc., has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash...
Garage, Inc., has identified the
following two mutually exclusive projects:
Year
Cash Flow (A)
Cash Flow (B)
0
–$
29,100
–$
29,100
1
14,500
4,350
2
12,400
9,850
3
9,250
15,300
4
5,150
16,900
a-1
What is the IRR for each of these projects? (Do not
round intermediate calculations. Enter your answers as a percent
rounded to 2 decimal places, e.g., 32.16.)
IRR
Project A
%
Project B
%
a-2
Using the IRR decision rule, which...
Mahjong, Inc., has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash...
Mahjong, Inc., has identified the following two mutually
exclusive projects:
Year
Cash Flow (A)
Cash Flow (B)
0
–$36,300
–$36,300
1
18,600
6,400
2
14,100
12,900
3
11,600
19,400
4
8,600
23,400
Required:
(a)
What is the IRR for Project A?
(Click to
select) 18.76% 19.16% 19.75% 20.34% 20.74%
(b)
What is the IRR for Project B?
(Click to
select) 21.63% 19.98% 20.6% 21.22% 19.57%
(c)
If the required return is 11 percent, what is the...
Bumble’s Bees, Inc., has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash...
Bumble’s Bees, Inc., has identified the following two mutually
exclusive projects:
Year
Cash Flow (A)
Cash Flow (B)
0
-17,000
-17,000
1
8,000
2,000
2
7,000
5,000
3
5,000
9,000
4
3,000
9,500
What is the IRR for each of these projects? If you apply the
IRR decision rule, which project should the company accept? Is this
decision necessarily correct?
If the required return is 11%, what is the NPV for each of
these projects? Which project will you choose...
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