Consider the following cash flows on two mutually exclusive projects for the Bahamas Recreation Corporation (BRC). Both projects require an annual return of 16 percent.

YearDeepwater FishingNew Submarine Ride0$980,000$1,910,0001400,000960,0002534,000830,0003450,000810,000

a-1.Compute the IRR for both projects.(Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

IRRDeepwater Fishing%Submarine Ride%

a-2.Based on the IRR, which project should you choose?

Submarine RideDeepwater Fishing

b-1.Calculate the incremental IRR for the cash flows.(Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Incremental IRR%

b-2.Based on the incremental IRR, which project should you choose?

Deepwater FishingSubmarine Ride

c-1.Compute the NPV for both projects.(Do not round intermediate calculations. Round your answers to 2 decimal places, e.g., 32.16.)

NPVDeepwater Fishing$Submarine Ride$

c-2.Based on the NPV, which project should you choose?

Deepwater FishingSubmarine Ride

c-3.Is the NPV decision consistent with the incremental IRR rule?NoYes