Consider two mutually exclusive R&D projects that Savage Tech is considering. Assume

the discount rate for both projects is $11$ percent

Project

A:

Server CPU $13$ micron processing project

By shrinking the die size to $13$ micron, the company 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$.$

Complete the following table: $($Do not round intermediate calculations. Enter the IRR

as a percent. Round your profitability index $(\frac{?}{PI})$ answers to $3$ decimal places, e$.$g$.,$

$32\mathrm{.}161,$ and other answers to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

What is the incremental IRR of investing in the larger project? $($Do not round

intermediate calculations and enter your answer as a percent rounded to $2$ decimal