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 9%.

Quantitative Problem: Bellinger Industries is considering two projects for indusion 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 9%. 2 3 0 1 4 600 230 Project A Project B -1,050 -1,050 360 280 300 750 300 350 What is Project Delta's IRR? Do not round intermediate calculations. Round your answer to two decimal places. % What is the significance of this IRR? after this point when mutually exclusive projects are considered there is no conflict in project acceptance between the NPV and IRR approaches. It is the -Select- -Select- Review t equity return t crossover rate interest yield -Select- 1. 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 NPV Profiles B NPV Profiles C NPV Profiles D NPV (5) 6007 INPV (5) 600+ 500 4001 INPV (5) ) 6007 500 4001 500+ 400 INPV (5) 600 500 400 300+ 2007 100+ 300 300 t 300+ 200 100 2007 100 200+ 100 5 10 15 25 30 5 10 15 25 30 5 10 15 25 30 5 10 15 20 25 30 . -1001 -100 -200 Cost of Capital Cost of Capital -2001 Cost Capital (%) Cost of Capital -100 -2001 -300 -4001 -100 -2001 -300 -4001 -300 -400+ -300 -4001