Question: Bruin, Inc., has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 $ 29,300 $ 29,300 1 14,700 4,450

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

Year Cash Flow (A) Cash Flow (B)
0 $ 29,300 $ 29,300
1 14,700 4,450
2 12,600 9,950
3 9,350 15,500
4 5,250 17,100

1. If the required return is 11 percent, what is the NPV for each of these projects?

2. Which project will the company choose if it applies the NPV decision rule?

3. what discount rate would the company be indifferent between these two projects?

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