2. Bruin, Inc., has identified the following two mutually exclusive projects: Year 0 1 234 Cash...

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2. Bruin, Inc., has identified the following two mutually exclusive projects: Year 0 1 234 Cash Flow (A) -$41,300 19,100 17,800 15,200 8,400 Cash Flow (B) -$41,300 6,300 14,200 17,900 30,300 a. 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? b. If the required return is 11 percent, what is the NPV for each of these projects? Which project will the company choose if it applies the NPV decision rule? 2. Bruin, Inc., has identified the following two mutually exclusive projects: Year 0 1 234 Cash Flow (A) -$41,300 19,100 17,800 15,200 8,400 Cash Flow (B) -$41,300 6,300 14,200 17,900 30,300 a. 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? b. If the required return is 11 percent, what is the NPV for each of these projects? Which project will the company choose if it applies the NPV decision rule?

Answer rating: 100% (QA)

Solution A Working are correct in Part A B Period O Initial Investment 1 Cash Inflow 2 3 4 Part... View the full answer