Marissa Manufacturing is presented with the following two mutually exclusive projects. The required return for both projects is 17 percent. Year 0 Project M -$ 142,000 Project N -$ 353,000 1 63,300 153,500 2 81,300 178,000 3 72,300 4 58,300 138,500 108,000 a. What is the IRR for each project? Note: 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? Note: 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? a. Project M Project N b. Project M Project N c. Accept project % %
Marissa Manufacturing is presented with the following two mutually exclusive projects. The required return for both projects is 17 percent. Year 0 Project M -$ 142,000 Project N -$ 353,000 1 63,300 153,500 2 81,300 178,000 3 72,300 4 58,300 138,500 108,000 a. What is the IRR for each project? Note: 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? Note: 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? a. Project M Project N b. Project M Project N c. Accept project % %
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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Transcribed Image Text:Marissa Manufacturing is presented with the following two mutually exclusive projects. The required return for both
projects is 17 percent.
Year
0
Project M
-$ 142,000
Project N
-$ 353,000
1
63,300
153,500
2
81,300
178,000
3
72,300
4
58,300
138,500
108,000
a. What is the IRR for each project?
Note: 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?
Note: 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?
a. Project M
Project N
b. Project M
Project N
c. Accept project
%
%
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