Question: Garage, Inc., has identified the following two mutually exclusive projects. Assume that the required return is 9 percent. Year Cash Flow (A) Cash Flow (B)

  1. Garage, Inc., has identified the following two mutually exclusive projects. Assume that the required return is 9 percent.

    Year

    Cash Flow (A)

    Cash Flow (B)

    0

    -50,000

    -80,000

    1

    23,000

    22,000

    2

    25,000

    24,000

    3

    26,000

    12,000

    4

    7,000

    45,000

    What is the IRR for each of these projects? Using the IRR decision rule, which project should the company accept?

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