Question: Bruin, Inc., has identified the following two mutually exclusive projects: Year 1 2 3 4 Cash Flow (A) -$29,700 15.100 13,000 9,550 5,450 Cash Flow



Bruin, Inc., has identified the following two mutually exclusive projects: Year 1 2 3 4 Cash Flow (A) -$29,700 15.100 13,000 9,550 5,450 Cash Flow (B) -$29.700 4,650 10,150 15,900 17,500 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 a-2 Using the IRR decision rule, which project should the company accept? O Project A O Project B a-3 Is this decision necessarily correct? e Yes b-1 If the required return is 12 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 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
