Question: Screenshot provides all the information given. Quantitative Problem: Bellinger Industries is considering two projects for inclusion in its capital budget, and you have been asked
Screenshot provides all the information given.
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 Project A-1,100 Project B 1,100 590 270 220 390 280 770 360 280 What is Project Delta's IRR? Do not round intermediate calculations. Round your answer to two decimal places Hide Feedback Partially Correct Check My work Feedback Review the IRR equation. The solution for IRR is a percentage rate not a dollar value The IRR calculation is not dependent on the firm's WACC. Don't forget the minus sign for the Year 0 cash flow Don't forget to include the Year 0 cash flow in your calculation t = Project A CFt -Project B CFt, or vice versa; but once you begin the calculation you can't switch the subtraction order
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