Question: Bruin, Incorporated, has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 $ 37,200 $ 37,200 1 19,570 7,060

Bruin, Incorporated, has identified the following two mutually exclusive projects:

Year Cash Flow (A) Cash Flow (B)
0 $ 37,200 $ 37,200
1 19,570 7,060
2 15,070 13,560
3 12,570 20,050
4 9,570 24,050

a. What is the IRR for Project A?

b. What is the IRR for Project B?

c. If the required return is 12 percent, what is the NPV for Project A?

d. If the required return is 12 percent, what is the NPV for Project B?

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

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