Question: Zayas, LLC, has identified the following two mutually exclusive projects: Year Cash Flow (A) -$ 52,000 Cash Flow (B) -$52,000 15,800 28,000 1 24.000 17.000


Zayas, LLC, has identified the following two mutually exclusive projects: Year Cash Flow (A) -$ 52,000 Cash Flow (B) -$52,000 15,800 28,000 1 24.000 17.000 12,400 25,800 4 a. What is the IRR for each of these projects? (Do not round intermediate calcu lations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Internal rate of return Project A 22.83 % Project B 21.16 % If you apply the IRR decision rule, which project should the company accept? Project A b. Assume the required return is 11 percent. What is the NPV for each of these projects? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g. 32.16.) Net present value $ 11679.44 Project A Project B 12848.21 Which project will you choose if you apply the NPV decision rule? Project B s the NPV for each of these projects? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., b. Assume the required returm is 11 percent. What 32.16.) Net present value $ 11679.44 $ 12848.21 Project A Project B Which project will you choose if you apply the NPV decision rule? Project B c. Over what range of discount rates would you choose Project A? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Project A Above 21 Over what range 32.16.) f discount rates would you choose Project B? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., Project B Below 16 At what discount rate would you be indifferent between these two projects? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Discount rate 14.85%
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