Question: Consider the following cash flows on two mutually exclusive projects for the Bahamas Recreation Corporation. Both projects require an annual return of 18 percent. Year

Consider the following cash flows on two mutually exclusive projects for the Bahamas Recreation Corporation. Both projects require an annual return of 18 percent. Year 0 1 2 3 Deepwater Fishing -$ 1,045,000 465,000 586,000 515,000 Submarine Ride -$ 2,040,000 1,090,000 a-1. Compute the IRR for both projects. Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. a-2. Based on the IRR, which project should you choose? b-1. Calculate the incremental IRR for the cash flows. Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b-2. Based on the incremental IRR, which project should you choose? c-1. Compute the NPV for both projects. 895,000 940,000 Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. c-2. Based on the NPV, which project should you choose? c-3. Is the NPV rule consistent with the incremental IRR rule? a-1. Deepwater Fishing IRR Submarine Ride IRR a-2. IRR decision b-1. Incremental IRR b-2. Incremental IRR decision c-1. Deepwater fishing NPV Submarine ride NPV c-2. NPV decision c-3. Are the rules consistent? % % %

Consider the following cash flows on two mutually exclusive projects for the Bahamas Recreation Corporation Both projects require an annual retuin of 18 percent. a-1. Compute the IRR for both projects: Note: Do not round intermediate calculations and enter your onswers as o percent rounded to 2 decimal places, e.9, 32.16 . Q-2. Based on the IRR, which project should you choose? b-1. Calculate the incremental IiRk for the cash fiows. Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 dicimal pioces, e.g., 32.16 . b-2. Based on the incremental IRR, which project should you choose? c-1. Compute the NPV for both projects Note: Do not round intermediate calculations and round your answers to 2 decimal ploces, e.g., 3216. c-2. Based on the NPV, which project should you choose? c-3. Is the NPV rule consistent with the incremental IRR rule

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