Parkallen Inc. has identified the following two mutually exclusive projects:

Year	Cash Flow (A)				Cash Flow (B)
0	$	38,975			$	38,975
1		18,105				8,100
2		16,290				13,600
3		13,190				19,000
4		9,090				21,360

a-1. What is the IRR for each of these projects? (Do not round intermediate calculations. Round the final answers to 2 decimal places.)

	IRR
Project A	%
Project B	%

a-2. Using the IRR decision rule, which project should the company accept?

multiple choice 1

• Project A

• Project B

a-3. Is this decision necessarily correct?

multiple choice 2

• Yes

• No

b-1. If the required return is 11%, what is the NPV for each of these projects? (Do not round intermediate calculations. Round the final answers to 2 decimal places. Omit $ sign in your response.)

	NPV
Project A	$
Project B	$

b-2. Which project will the company choose if it applies the NPV decision rule?

multiple choice 3

• Project A

• Project B

c. At what discount rate would the company be indifferent between these two projects? (Do not round intermediate calculations. Round the final answer to 2 decimal places.)

Discount rate %