Question: can you answer without using and excel |11. NPV versus RR Consider the following cash flows on two mutually exclusive projects for the Bahamas Recreation
|11. NPV versus RR Consider the following cash flows on two mutually exclusive projects for the Bahamas Recreation Corporation (BRC). Both projects require an annual return of 14 percent. 0 1 2 3 -$875,000 330,000 480,000 440000 -$1,650,000 890000 730,000 590,000 a. If your decision rule is to accept the project with the greater IRR, which project should you choose? b. Because you are fully aware of the IRR rule's scale problem, you calculate the incremental IRR for the cash flows. Based on your computation, which project should you choose? c. To be prudent, you compute the NPV for both projects. Which project should you choose? Is it consistent with the incremental IRR rule
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