Item2eBookCheck my workCheck My Work button is now enabledItem 2Consider two mutually exclusive R&D projects that Savage Tech is considering. Assume the discount rate for both projects is 9 percent.Project A: Server CPU .13 micron processing projectBy 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 projectEntry 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 B0 ?$ 765,000 ?$ 976,0001 352,000 267,0002 373,000 378,0003 261,000 372,0004 186,000 424,0005 132,000 511,000Complete the following table:Note: 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.What is the incremental IRR of investing in the larger project?Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.

Consider two mutually exclusive R&D projects that Savage Tech is considering. Assume the discount rate for both projects is 9 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. Year Project A Project B e -% 765,400 -$ 976,000 1 352,000 267,000 2 373,000 378,000 3 261, 000 372,600 4 186,000 424,000 5 132,900 511, 900 Complete the following table: Note: Do not round intermediate calculations. Enter the IRR as a percent. Round your profitability index (Pl) answers to 3 decimal places, e.g., 32.161, and other answers to 2 decimal places, e.g., 32.16. Project B What is the incremental IRR of investing in the larger project? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. Incremental IRR 4 1%