Question: Bruin, Inc., has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) -$29.800 -$29,800 1 15,200 4.700 2 13.100 10,200


Bruin, Inc., has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) -$29.800 -$29,800 1 15,200 4.700 2 13.100 10,200 3 9.600 16.000 4 5,500 17,600 a-1 What is the IRR for each of these projects? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g. 32.16.) Project A Project B % % a-2 Using the IRR decision rule, which project should the company accept? O Project A Project B a-3 Is this decision necessarily correct? Yes No b-1 If the required return is 10 percent, what is the NPV for each of these projects? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g. 32.16.) Project A Project B b-2Which project will the company choose if it applies the NPV decision rule? Project A Project B c. At what discount rate would the company be indifferent between these two projects? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g. 32.16.) Discount rate %
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