Question: 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'

 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.

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 1 2 3 4 Project A Project B -1,250 -1,250 700 280 370 315 200 395 310 750 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? It is the crossover new 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. 1-Select NPV Profiles A NPV Profiles INPVISE INP.IS Select NPV Profiles A NPV Profiles B INPV 5 600+ IN PVC 600 500 500 400 400+ 300 300 200 2007 100 100 + un 15 20 25 30 10 20 25 30 -100 -200 Cost of Capital) Cost of Capital -100 -200 -300 400 -300 -400 NPV Profiles C NPV Profiles D INPV (5) INPV (5) 600 600 500 500 400 300 200 100 400+ 300 200 100 5 10 20 25 30 10 20 25 30 -1001 -100 -200 Como Captal Cost of Capital -300 -400 -200 300 -400

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