Consider projects A and B:Cash Flows (dollars)ProjectACo-30,500C1C221,40021,400NPV at 11%+$6,148.00B-50,50033,50033,500+ 6,869.53a. Calculate IRRS for A and B. (Do not round intermediate calculations. Round youranswers to 2 decimal places.)ProjectABIRR%%b. Which project does the IRR rule suggest is best?O Project A○ Project Bc. Which project is really best?○ Project AO Project Bk

Determine the answers for parts (a) through (c) using Excel as follows:Formula sheet:Notes:To…

Answered: Consider projects A and B: Cash Flows…

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter10: The Basics Of Capital Budgeting: Evaluating Cash Flows

Section10.4: Internal Rate Of Return (irr)

Problem 2ST

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Consider the following two mutually exclusive projects: Year Cash Flow (X) Cash Flow (Y) 0 -$ 15,900 -$ 15,900 6,710 7,290 23 7,290 7,730 3,630 4,810 a. What is the IRR of Project X? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b. What is the IRR of Project Y? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. c. What is the crossover rate for these two projects? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. a. IRR b. IRR % % c. Crossover rate %
Consider two mutually exclusive projects A and B: Cash Flows (dollars) Project Co A -39,500 B -59,500 C₁ 28,600 42,500 C₂ NPV at 11% 28,600 +$ 9,478 42,500 +13,282 a. Calculate IRRS for A and B. Note: Do not round intermediate calculations. Enter your answers as a perc Project A B IRR % % b. Which project does the IRR rule suggest is best? Project A Project B c. Which project is really best? Project A Project B P
Compute the internal rate of return for the cash flows of the following two projects. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Year Project A 0 -$13,800 Project B -$ 11,400 1 5,400 2,900 2 6,200 8,500 3 5,000 4,600 Project A Project B % %
11. IRR rule (S5.3) Consider the following two mutually exclusive projects: Cash flows ($) Project A B Co -50 -50 C₁ +60 0 C₂ +60 0 0 +140 Page 142 a. Calculate the NPV of each project for discount rates of 0%, 10%, and 20%. Plot these on a graph with NPV on the vertical axis and discount rate on the horizontal axis. b. What is the approximate IRR for each project? c. In what circumstances should the company accept project A? d. Calculate the NPV of the incremental investment (B – A) for discount rates of 0%, 10%, and 20%. Plot these on your graph. Show that the circumstances in which you would accept A are also those in which the IRR on the incremental investment is less than the opportunity cost of capital.
The following are the cash flows of two projects: Project B Year Project A 0 $ (235) $ (235) 115 135 115 135 115 135 115 1234O 1 2 3 4 What are the internal rates of return on projects A and B? Note: Enter your answers as a percent rounded to 2 decimal places. Project A B IRR % %
Consider the following two mutually exclusive projects: Year Cash Flow (X) Cash Flow (Y) 0 -$ 15,900 -$ 15,900 1 6,710 7,290 2 7,290 7,730 3 4,810 3,630 a. What is the IRR of Project X? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decim b. What is the IRR of Project Y? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decim c. What is the crossover rate for these two projects? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decim a. IRR b. IRR % % c. Crossover rate %
QUESTION 3 If the cash flows for Project M are CO= -2,000; C1 = +400; C2 = +1,400; and C3= +1,300, calculate the IRR for the project. Please input the percentage format for your answer. And there is no need to put the percentage sign (%).
Compute the internal rate of return for the cash flows of the following two projects: (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Year Project A Project B 0 –$ 9,800 –$ 7,400 1 3,800 2,100 2 4,600 5,300 3 3,400 3,000 Internal rate of return Project A % Project B %
Consider two mutually exclusive projects A and B: Project Cash Flows (dollars) NPV at 12% Co C 0 C1 C 1 C2 C 2 A-35,500 25,400 25,400 + $7,427 B -55,500 38,500 38,500 +9,567 Calculate IRRS for A and B. Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.
MAKE SURE YOU ANSWER THIS QUESTION IN EXCEL FORMULA, NOT ALGEBRAICALLY!!!!!
A project is being analyzed with the following set of cash flows. Calculate the internal rate of return (IRR). (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Cash Year Flow 0 16,000 123 6,700 8,000 6,500 IRR %

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