Bruin, Incorporated, has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 -$ 36,200 1 6,300 12,800 -$36,200 18,700 14,200 11,700 8,700 a. What is the IRR for Project A? 2 3 4 IRR 19,300 23,300 b. What is the IRR for Project B? IRR
Bruin, Incorporated, has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 -$ 36,200 1 6,300 12,800 -$36,200 18,700 14,200 11,700 8,700 a. What is the IRR for Project A? 2 3 4 IRR 19,300 23,300 b. What is the IRR for Project B? IRR
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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![Bruin, Incorporated, has identified the following two mutually exclusive projects:
| Year | Cash Flow (A) | Cash Flow (B) |
|------|--------------|--------------|
| 0 | -$36,200 | -$36,200 |
| 1 | 18,700 | 6,300 |
| 2 | 14,200 | 12,800 |
| 3 | 11,700 | 19,300 |
| 4 | 8,700 | 23,300 |
**a. What is the IRR for Project A?**
IRR [Input Box]
**b. What is the IRR for Project B?**
IRR [Input Box]
- The table lists the cash flows for two projects, A and B, over four years.
- Both projects have an initial investment (negative cash flow) of $36,200.
- Subsequent cash inflows vary for each year and for each project.
- You need to calculate the Internal Rate of Return (IRR) for each project to evaluate their potential profitability.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0f20cc49-c768-43e6-a9c4-6f0d40e2f4fd%2F0af165db-e770-4dfe-ad05-2be151bce3c1%2F2xg2riw_processed.png&w=3840&q=75)
Transcribed Image Text:Bruin, Incorporated, has identified the following two mutually exclusive projects:
| Year | Cash Flow (A) | Cash Flow (B) |
|------|--------------|--------------|
| 0 | -$36,200 | -$36,200 |
| 1 | 18,700 | 6,300 |
| 2 | 14,200 | 12,800 |
| 3 | 11,700 | 19,300 |
| 4 | 8,700 | 23,300 |
**a. What is the IRR for Project A?**
IRR [Input Box]
**b. What is the IRR for Project B?**
IRR [Input Box]
- The table lists the cash flows for two projects, A and B, over four years.
- Both projects have an initial investment (negative cash flow) of $36,200.
- Subsequent cash inflows vary for each year and for each project.
- You need to calculate the Internal Rate of Return (IRR) for each project to evaluate their potential profitability.
Transcribed Image Text:### Project Net Present Value (NPV) Analysis
#### Calculating NPV with a 10% Required Return
**c. Project A**
- **Question:** If the required return is 10 percent, what is the NPV for Project A?
- **Workspace:** A field labeled "NPV" is provided to perform calculations or enter results.
**d. Project B**
- **Question:** If the required return is 10 percent, what is the NPV for Project B?
- **Workspace:** Another "NPV" field is available for computations or results pertinent to Project B.
### Description:
The questions are designed for computing the Net Present Value (NPV) of Projects A and B, assuming a required rate of return of 10%. The provided NPV fields allow for inputting or calculating values to determine the profitability of each project under the specified conditions.
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