Question: Please answer this question Quantitative Problem: Bellinger Industries is considering two projects for inclusion in its capital budget, and you have been asked to do
Quantitative Problem: Bellinger Industries is considering two projects for inclusion in its capital budget, and you have been asked to do the analysis. Both projects' after-tax cash flows are shown on the time line below. Depreciation, salvage values, net operating working capital requirements, and tax effects are all included in these cash flows. Both projects have 4-year lives, and they have risk characteristics similar to the firm's average project. Bellinger's WACC is 10%. 0 2 3 4 Project A 1,100 590 Project B -1,100 270 360 220 280 280 390 770 What is Project Delta's IRR? Do not round intermediate calculations. Round your answer to two decimal places. Show All Feedback What is the significance of this IRR? It is the crossover rate, after this point when mutually exclusive projects are considered there is no conflict in project acceptance between the NPV and IRR approaches. Review the graphs below. Select the graph that correctly represents the correct NPV profile for Projects A and B by using the following drop down menu. NPV Profiles A 600 500 NPV (S) 600 500 400 300 200 100 10 1 25 30 -100 200 300 400+ Cor Capital (%) NPV Profiles B 600 500 400 300 200 100 10 15 25 30 100 200 -300 4004 Captal (%) NPV Profiles C NPV Proflles NPV (S) 600 500 400 300 200 100 100 200 -300 400+ Cost, Captal%) NPV Profiles D 600 500 400 300 200 100 5 10 15 20 25 30 -100 200 -300 400 Catal(%)
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