Question: Consider the following cash flows of two mutually exclusive projects for Tokyo Rubber Company. Assume the discount rate for Tokyo Rubber Company is 10 percent.
Consider the following cash flows of two mutually exclusive projects for Tokyo Rubber Company. Assume the discount rate for Tokyo Rubber Company is 10 percent.
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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 this analysis, is incremental IRR analysis necessary? If yes, please conduct the analysis.
Year Dry Prepreg Solvent Prepreg -$1700,000 1,100.000 900,000 750,000 -$750,000 375,000 600,000 390,000
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