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

Consider the following cash flows on two mutuallyConsider the following cash flows on two mutually
Consider the following cash flows on two mutually exclusive projects for the Bahamas Recreation Corporation (BRC). Both projects require an annual return of 18 percent. New Deepwater Year Fishing Submarine Ride $1,050,000 $2,050,000 470,000 1,100,000 W N - 590,000 900,000 520,000 950,000 a-1. Compute the IRR for both projects. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Deepwater Fishing Submarine Ride % a-2. Based on the IRR, which project should you choose? O Deepwater Fishing O Submarine Ridec-1. Compute the NPV for both projects. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Deepwater Fishing Submarine Ride c-2. Based on the NPV, which project should you choose? O Submarine Ride O Deepwater Fishing c-3. Is the NPV decision consistent with the incremental IRR rule? O Yes O No

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