Marissa Manufacturing is presented with the following two mutually exclusive projects. The required return for both projects is 16 percent. Year 0 Project M -$ 139,000 Project N -$ 366,000 1 64,600 147,000 2 82,600 191,000 3 4 73,600 59,600 132,000 121,000 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 % %

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter12: Capital Budgeting: Decision Criteria
Section: Chapter Questions
Problem 11MC: In an unrelated analysis, you have the opportunity to choose between the following two mutually...
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Marissa Manufacturing is presented with the following two mutually exclusive projects. The required return for both projects is 16
percent.
Year
0
Project M
-$ 139,000
Project N
-$ 366,000
1
64,600
147,000
2
82,600
191,000
3
4
73,600
59,600
132,000
121,000
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
%
%
Transcribed Image Text:Marissa Manufacturing is presented with the following two mutually exclusive projects. The required return for both projects is 16 percent. Year 0 Project M -$ 139,000 Project N -$ 366,000 1 64,600 147,000 2 82,600 191,000 3 4 73,600 59,600 132,000 121,000 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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