Consider the following cash flows of two mutually exclusive projects for Spartan Rubber Company. Assume the discount rate for Spartan Rubber Company is 10 percent.

a. Based on the payback period, which project should be taken?
b. Based on the NPV, which project should be taken?
c. Based on the IRR, which project should be taken?
d. Based on the above analysis, is incremental IRR analysis necessary? If yes, please conduct the analysis.

Transcribed Image Text:

YEAR DRY PREPREG SOLVENT PREPREG -$1,800,000 700,000 500,000 1,300,000 $950,000 600,000 400,000 350,000