Bausch Company is presented with the following two mutually exclusive projects. The required return for both projects is 20 percent. Year Project M Project N 0 –$139,000 –$356,000 1 63,600 152,000 2 81,600 181,000 3 72,600 137,000 4 58,600 111,000 a. What is the IRR for each project? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the NPV for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) c. Which, if either, of the projects should the company accept?
Bausch Company is presented with the following two mutually exclusive projects. The required return for both projects is 20 percent. Year Project M Project N 0 –$139,000 –$356,000 1 63,600 152,000 2 81,600 181,000 3 72,600 137,000 4 58,600 111,000 a. What is the IRR for each project? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the NPV for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) c. Which, if either, of the projects should the company accept?
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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Bausch Company is presented with the following two mutually exclusive projects. The required return for both projects is 20 percent.
Year Project M Project N
0 –$139,000 –$356,000
1 63,600 152,000
2 81,600 181,000
3 72,600 137,000
4 58,600 111,000
a.
What is the IRR for each project? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
b. What is the NPV for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
c. Which, if either, of the projects should the company accept?
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