Romboski, LLC, has identified the following two mutually exclusive projects:

Year	Cash Flow (A)				Cash Flow (B)
0		$	56,000			$	56,000
1			32,000				19,400
2			26,000				23,400
3			19,000				28,000
4			13,200				25,400

Requirement 1:
(a)	What is the IRR for each of these projects?

	Internal rate of return
Project A	%
Project B	%

(b)

If you apply the IRR decision rule, which project should the company accept? a or b

Requirement 2:

(a)

Assume the required return is 12 percent. What is the NPV for each of these projects?

	Net present value
Project A	$
Project B	$

(b)

Which project will you choose if you apply the NPV decision rule? a or b

Requirement 3:
(a)	Over what range of discount rates would you choose Project A?

Project A

BelowAbove

@ %

(b) Over what range of discount rates would you choose Project B?

Project B

BelowAbove

@ %

At what discount rate would you be indifferent between these two projects? Discount rate %?