Question: Please show all your work including for all algebraic problems. The initial investments are $980,000 and $1,910,000 Year Deepwater Fishing Submarine Ride 0 $ 980,000
Please show all your work including for all algebraic problems.
The initial investments are $980,000 and $1,910,000
| Year | Deepwater Fishing | Submarine Ride | ||||
| 0 | $ | 980,000 | $ | 1,910,000 | ||
| 1 | 400,000 | 960,000 | ||||
| 2 | 534,000 | 830,000 | ||||
| 3 | 450,000 | 810,000 | ||||
| a-1. | Compute the IRR for both projects. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) |
| a-2. | Based on the IRR, which project should you choose? |
| b-1. | Calculate the incremental IRR for the cash flows. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
| b-2. | Based on the incremental IRR, which project should you choose? |
| c-1. | Compute the NPV for both projects. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) |
| c-2. | Based on the NPV, which project should you choose? |
| c-3. | Is the NPV rule consistent with the incremental IRR rule? |
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