Question: Bruin, Inc., has identified the following two mutually exclusive projects: Year AWNO Cash Flow (A) -$29,600 15,000 12,900 9,500 5,400 Cash Flow (B) -$29,600 4,600

Bruin, Inc., has identified the following two mutually exclusive projects: Year AWNO Cash Flow (A) -$29,600 15,000 12,900 9,500 5,400 Cash Flow (B) -$29,600 4,600 10,100 15,800 17,400 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 O Project B O Prolect B 2-3 Is this decision necessarily correct? Yes O NO b-1 If the required return is 11 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., 3216.) Project A Project B b-2Which project will the company choose If It applies the NPV decision rule? O Project A O 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
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
