Consider two mutually exclusive new product launch projects that Nagano Golf is considering. Assume the discount rate for both projects is 13 percent.

Project A:	Nagano NP-30.
	Professional clubs that will take an initial investment of $950,000 at Time 0. Introduction of new product at Year 6 will terminate further cash flows from this project.

Project B:	Nagano NX-20.
	High-end amateur clubs that will take an initial investment of $691,000 at Time 0. Introduction of new product at Year 6 will terminate further cash flows from this project.

Year	NP-30			NX-20
0	$	950,000		$	691,000
1		345,000			268,000
2		335,000			273,000
3		310,000			260,000
4		305,000			240,000
5		215,000			186,000

Complete the following table: (Do not round intermediate calculations. Enter the IRR as a percent. Round your profitability index (PI) answers to 3 decimal places (e.g., 32.161) and other answers to 2 decimal places (e.g., 32.16).)

	NP-30			NX-20
NPV	$			$
IRR		%			%
PI

What is the incremental IRR of investing in the larger project? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).)

Incremental IRR

%

Consider two mutually exclusive R&D projects that ADM is considering. Assume the discount rate for ADM is 13 percent.

Project A:	Server CPU .13 micron processing project
	By shrinking the die size to .13 micron, ADM will be able to offer server CPU chips with lower power consumption and heat generation, meaning faster CPUs.

Project B:	New telecom chip project
	Entry into this industry will require introduction of a new chip for cell phones. The know-how will require a large amount of up-front capital, but success of the project will lead to large cash flows later on.

Year	Project A			Project B
0	$	745,000		$	954,000
1		348,000			263,000
2		367,000			372,000
3		259,000			368,000
4		184,000			422,000
5		128,000			507,000

Complete the following table: (Do not round intermediate calculations. Enter the IRR as a percent. Round your profitability index (PI) answers to 3 decimal places (e.g., 32.161) and other answers to 2 decimal places (e.g., 32.16).)

	Project A			Project B
NPV	$			$
IRR		%			%
PI

What is the incremental IRR of investing in the larger project? (Do not round intermediate calculations. Enter your answer as a percent and round your answer to 2 decimal places (e.g., 32.16).)

Incremental IRR

%