Piercy, LLC, has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 -$77,500 -$77,500 1 2 234 3 4 43,000 29,000 23,000 21,000 a-1. What is the IRR for each of these projects? (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? (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 21,500 28,000 34,000 41,000 a-2. Project acceptance b-1. Project A Project B b-2. Project acceptance $ $ 21.50 % 19.58% Project A 15,426.54 16,463.27 Project B
Piercy, LLC, has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 -$77,500 -$77,500 1 2 234 3 4 43,000 29,000 23,000 21,000 a-1. What is the IRR for each of these projects? (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? (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 21,500 28,000 34,000 41,000 a-2. Project acceptance b-1. Project A Project B b-2. Project acceptance $ $ 21.50 % 19.58% Project A 15,426.54 16,463.27 Project B
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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