Question: Bruin, Inc., has identified the following two mutually exclusive projects: Year 0 Cash Flow (A) -$29,200 14,600 12,500 9,300 5,200 Cash Flow (B) -$29,200 4,400

 Bruin, Inc., has identified the following two mutually exclusive projects: Year

0 Cash Flow (A) -$29,200 14,600 12,500 9,300 5,200 Cash Flow (B)

-$29,200 4,400 9,900 15,400 17,000 a-1 What is the IRR for each

Bruin, Inc., has identified the following two mutually exclusive projects: Year 0 Cash Flow (A) -$29,200 14,600 12,500 9,300 5,200 Cash Flow (B) -$29,200 4,400 9,900 15,400 17,000 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? Project A Project B a-3 Is this decision necessarily correct? Yes ONo 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 Bronco, Inc., imposes a payback cutoff of three years for its international investment projects. Year Cash Flow (A) Cash Flow (B) -$54,000 $ 64,000 20,000 12,000 22,000 15,000 18,000 20,000 5,000 224,000 WN What is the payback period for both projects? (Round your answers to 2 decimal places, e.g., 32.16.) Project A Project B years years Which project should the company accept? Project A Project B

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!