Hardchoice Corp. is a firm considering prospective capital budgeting projects. Selected data on the projects follow: Image attached 1b) Ignoring the information in question (1a), assume instead that projects A and C are independent, Hardchoice is subject to capital rationing (i.e., it may not be able to afford both projects), and the relevant discount rate is 10%. a)  What is the IRR of Project A? Project C?  b)  How would you rank Project A compared to Project C?    Pls show formula used. Final dollar answers should be rounded to two decimal places. Interest rate answers should be rounded to 6 decimal places if expressed as a decimal or 4 decimal places if expressed as a percent. Use timeline if necessary. No excel .Thanks!

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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 Hardchoice Corp. is a firm considering prospective capital budgeting projects. Selected data on the projects follow: Image attached

1b) Ignoring the information in question (1a), assume instead that projects A and C are independent, Hardchoice is subject to capital rationing (i.e., it may not be able to afford both projects), and the relevant discount rate is 10%.

a)  What is the IRR of Project A? Project C? 

b)  How would you rank Project A compared to Project C? 

 

Pls show formula used.

Final dollar answers should be rounded to two decimal places. Interest rate answers should be rounded to 6 decimal places if expressed as a decimal or 4 decimal places if expressed as a percent.

Use timeline if necessary. No excel .Thanks!

Project
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
A
-400
100
110
120
130
140
В-А
C
-200
100
100
100
100
100
D
-400
140
130
120
110
100
Transcribed Image Text:Project Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 A -400 100 110 120 130 140 В-А C -200 100 100 100 100 100 D -400 140 130 120 110 100
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