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
Related questions
Question
Please help i need only c1, c2, c3
![Piercy, LLC, has identified the following two mutually exclusive projects:
Year Cash Flow (A) Cash Flow (B)
0
-$77,500
-$ 77,500
1
43,000
21,500
2
29,000
28,000
3
34,000
4
41,000
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
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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8ecf2e6a-bccc-46cf-8289-76a9f4ea9c71%2F436266f0-9e41-46ea-b288-ba2787ec8272%2F4u9ja0g_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Piercy, LLC, has identified the following two mutually exclusive projects:
Year Cash Flow (A) Cash Flow (B)
0
-$77,500
-$ 77,500
1
43,000
21,500
2
29,000
28,000
3
34,000
4
41,000
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
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
![c-1. Over what range of discount rates would you choose Project A? (Do not round
intermediate calculations and enter your answer as a percent rounded to 2
decimal places, e.g., 32.16.)
c-2. Over what range of discount rates would you choose Project B? (Do not round
intermediate calculations and enter your answer as a percent rounded to 2
decimal places, e.g., 32.16.)
c-3.At what discount rate would you be indifferent between these two projects? (Do not
round intermediate calculations and enter your answer as a percent rounded to 2
decimal places, e.g., 32.16.)
Project A
Project B
Indifferent interest rate
Above
Below
an interest rate of
an interest rate of
%
%
%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8ecf2e6a-bccc-46cf-8289-76a9f4ea9c71%2F436266f0-9e41-46ea-b288-ba2787ec8272%2Fyep5bh_processed.jpeg&w=3840&q=75)
Transcribed Image Text:c-1. Over what range of discount rates would you choose Project A? (Do not round
intermediate calculations and enter your answer as a percent rounded to 2
decimal places, e.g., 32.16.)
c-2. Over what range of discount rates would you choose Project B? (Do not round
intermediate calculations and enter your answer as a percent rounded to 2
decimal places, e.g., 32.16.)
c-3.At what discount rate would you be indifferent between these two projects? (Do not
round intermediate calculations and enter your answer as a percent rounded to 2
decimal places, e.g., 32.16.)
Project A
Project B
Indifferent interest rate
Above
Below
an interest rate of
an interest rate of
%
%
%
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