Bruin, Incorporated has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) -$ 41,300 -$ 41,300 1 19,100 6,300 2 17,800 14,200 B 4 15,200 17,900 8,400 30,300 a-1. What is the IRR for each of these projects? Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. a-2. If you apply the IRR decision rule, which project should the company accept? b-1. Assume the required return is 11 percent. What is the NPV for each of these projects? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. b-2. Which project will you choose if you apply the NPV decision rule? a-1. Project A Project B a-2. Project acceptance b-1. Project A Project B b-2. Project acceptance % %
Bruin, Incorporated has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) -$ 41,300 -$ 41,300 1 19,100 6,300 2 17,800 14,200 B 4 15,200 17,900 8,400 30,300 a-1. What is the IRR for each of these projects? Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. a-2. If you apply the IRR decision rule, which project should the company accept? b-1. Assume the required return is 11 percent. What is the NPV for each of these projects? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. b-2. Which project will you choose if you apply the NPV decision rule? a-1. Project A Project B a-2. Project acceptance b-1. Project A Project B b-2. Project acceptance % %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Bruin, Incorporated has identified the following two mutually exclusive projects:
Year
Cash Flow (A)
Cash Flow (B)
-$ 41,300
-$ 41,300
1
19,100
6,300
2
17,800
14,200
B
4
15,200
17,900
8,400
30,300
a-1. What is the IRR for each of these projects?
Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal
places, e.g., 32.16.
a-2. If you apply the IRR decision rule, which project should the company accept?
b-1. Assume the required return is 11 percent. What is the NPV for each of these projects?
Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.
b-2. Which project will you choose if you apply the NPV decision rule?
a-1. Project A
Project B
a-2. Project acceptance
b-1. Project A
Project B
b-2. Project acceptance
%
%
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