Exablaze is an Australia-based designer and manufacturer of advanced network devices aimed at reducing latency and...

 

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Exablaze is an Australia-based designer and manufacturer of advanced network devices aimed at reducing latency and improving network performance. Exablaze has two mutually exclusive projects. The required return is 8%. EXABLAZE Project A Year Cash Flow 012345 ($584,000) $182,400 $127,500 $105,000 $148,600 $252,000 Project B Year Cash Flow 012345 ($700,000) $236,800 $169,300 $162,600 $168,800 $209,100 a. Calculate the IRR for both projects. Which project would you select? b. Calculate the NPV for both projects. Which project would you select? c. Which project should the company accept overall? (50 POINTS) Exablaze is an Australia-based designer and manufacturer of advanced network devices aimed at reducing latency and improving network performance. Exablaze has two mutually exclusive projects. The required return is 8%. EXABLAZE Project A Year Cash Flow 012345 ($584,000) $182,400 $127,500 $105,000 $148,600 $252,000 Project B Year Cash Flow 012345 ($700,000) $236,800 $169,300 $162,600 $168,800 $209,100 a. Calculate the IRR for both projects. Which project would you select? b. Calculate the NPV for both projects. Which project would you select? c. Which project should the company accept overall? (50 POINTS)

Answer rating: 100% (QA)

To calculate the Internal Rate of Return IRR for each project we need to find the discount rate at which the Net Present Value NPV of the cash flows e... View the full answer