DEF, Inc is considering the following two mutually exclusive projects with similar risks Year Project A Project B 0 $60,000 $60,000 1 20,500 18,200 2 15,600 24,400 3 24,400 15,600 4 18,200 20,500 (a) What is the IRR for each of the projects The required return is 12 If you apply the IRR decision rule, which project should the company accept

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Question: DEF, Inc. is considering the following two mutually exclusive projects with similar risks: Year Project A Project B 0 $60,000 $60,000 1 20,500 18,200 2

DEF, Inc. is considering the following two mutually exclusive projects with similar risks:

Year	Project A	Project B
0	$60,000	$60,000
1	20,500	18,200
2	15,600	24,400
3	24,400	15,600
4	18,200	20,500

(a) What is the IRR for each of the projects? The required return is 12%. If you apply the IRR decision rule, which project should the company accept?

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