Parkallen Inc. has identified the following two mutually exclusive projects: Year Cash Flow (A)
Question:
Parkallen Inc. has identified the following two mutually exclusive projects:
Year Cash Flow (A) Cash Flow (B)
0 –$ 29,000 –$ 29,000
1 14,400 4,300
2 12,300 9,800
3 9,200 15,200
4 5,100 16,800
What is the IRR for each of these projects? (Do not round intermediate calculations. Round the final answers to 2 decimal places.)
Using 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? (Do not round intermediate calculations. Round the final answers to 2 decimal places. Omit $ sign in your response.)
Which project will the company choose if it applies the NPV decision rule?
At what discount rate would the company be indifferent between these two projects? (Do not round intermediate calculations. Round the final answer to 2 decimal places.)
Precalculus Concepts Through Functions A Unit Circle Approach To Trigonometry
ISBN: 9780137945139
5th Edition
Authors: Michael Sullivan