* 12. NPV versus IRR [LO1, 5] Mahjong, Inc., has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) -$43,000 -$43,000 23,000 7,000 13,800 24,000 2 17,900 12,400 4. 9,400 26.000 a. What is the IRR for each of these projects? Using the IRR decision rule, which project should the company accept? Is this decision necessarily correct? b. If the required return is I1 percent, what is the NPV for each of these projects? Which project will the company choose if it applies the NPV decision rule?
* 12. NPV versus IRR [LO1, 5] Mahjong, Inc., has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) -$43,000 -$43,000 23,000 7,000 13,800 24,000 2 17,900 12,400 4. 9,400 26.000 a. What is the IRR for each of these projects? Using the IRR decision rule, which project should the company accept? Is this decision necessarily correct? b. If the required return is I1 percent, what is the NPV for each of these projects? Which project will the company choose if it applies the NPV decision rule?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
note : please you dont use excel.
![X 12.
NPV versus IRR (LO1, 5] Mahjong, Inc., has identified the following two
mutually exclusive projects:
Year
Cash Flow (A)
Cash Flow (B)
-%$443,000
-$43,000
7,000
13,800
24,000
23,000
2.
17,900
12,400,
9,400
4
26,000
a. What is the IRR for each of these projects? Using the IRR decision rule, which
project should the company accept? Is this decision necessarily correet?
b. If the required return is I1 percent, what is the NPV for each of these projects?
Which project will the company choose if it applies the NPV decision rule?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc9555c8e-e067-4470-bc55-35232109ade9%2Fcb37989c-3bdf-444a-952c-2c3e2220b131%2F6g7ad24k_processed.jpeg&w=3840&q=75)
Transcribed Image Text:X 12.
NPV versus IRR (LO1, 5] Mahjong, Inc., has identified the following two
mutually exclusive projects:
Year
Cash Flow (A)
Cash Flow (B)
-%$443,000
-$43,000
7,000
13,800
24,000
23,000
2.
17,900
12,400,
9,400
4
26,000
a. What is the IRR for each of these projects? Using the IRR decision rule, which
project should the company accept? Is this decision necessarily correet?
b. If the required return is I1 percent, what is the NPV for each of these projects?
Which project will the company choose if it applies the NPV decision rule?
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