You work for an outdoor play structure manufacturing company and are trying to decide between the...

 

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You work for an outdoor play structure manufacturing company and are trying to decide between the following two projects: Year-End Cash Flows (S thousands) Project Playhouse (minor project) Fort (major poject) 0 -29 -76 1 18 38 2 21 52 IRR 21.6% 11.4% You can undertake only one project. If your cost of capital is 7%, use the incremental IRR rule to make the correct decision. The incremental IRR is %. (Round to two decimal places.) With that incremental IRR and a cost of capital of 7%, you should undertake the (Select from the drop-down menu.) You work for an outdoor play structure manufacturing company and are trying to decide between the following two projects: Year-End Cash Flows (S thousands) Project Playhouse (minor project) Fort (major poject) 0 -29 -76 1 18 38 2 21 52 IRR 21.6% 11.4% You can undertake only one project. If your cost of capital is 7%, use the incremental IRR rule to make the correct decision. The incremental IRR is %. (Round to two decimal places.) With that incremental IRR and a cost of capital of 7%, you should undertake the (Select from the drop-down menu.)

Answer rating: 100% (QA)

To calculate the incremental IRR we need to find the difference in cash flows between the ... View the full answer