Bruin, Incorporated, has identified the following two mutually exclusive projectsPlease help me solve this problem using Excel. Bruin, Incorporated, has identified the following two mutually exclusiveprojects:Year0AWN TO1234Cash Flow (A)-$ 59,00035,00029,00020,50013,800Cash Flow (B)-$ 59,00022,10026,10031,00025,100a-1. What is the IRR for each of these projects?Note: Do not round intermediate calculations and enter your answers as apercent rounded to 2 decimal places, e.g., 32.16.a-2. If you apply the IRR decision rule, which project should the companyaccept?b-1. Assume the required return is 15 percent. What is the NPV for each ofthese projects?Note: Do not round intermediate calculations and round your answers to2 decimal places, e.g., 32.16.b-2. Which project will you choose of you apply the NPV decision rule?c-1. Over what range of discount rates would you choose Project A?Note: Do not round intermediate calculations and enter your answer as apercent rounded to 2 decimal places, e.g., 32.16.c-2. Over what range of discount rates would you choose Project B?Note: Do not round intermediate calculations and enter your answer as apercent rounded to 2 decimal places, e.g., 32.16.d. At what discount rate would you be indifferent between these twoprojects?Note: Do not round intermediate calculations and enter your answer as apercent rounded to 2 decimal places, e.g., 32.16. a-1. Project AProject Ba-2.b-1.b-2.C-1.c-2.d.Project AProject BDiscount rate%%%%%

To Find: IRR NPV NPV profile for both projects

Bruin, Incorporated, has identified the following two mutually exclusive projects: Year 0 1 2 1234 3 Cash Flow (A) -$ 59,000 35,000 29,000 20,500 13,800 Cash Flow (B) -$ 59,000 22,100 26,100 31,000 25,100

Bruin, Incorporated, has identified the following two mutually exclusive projects: Year 0 1 2 1234 3 Cash Flow (A) -$ 59,000 35,000 29,000 20,500 13,800 Cash Flow (B) -$ 59,000 22,100 26,100 31,000 25,100

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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Lopez Industries has identified the following two mutually exclusive capital investment projects: Year Project A Project B 0 -16000 -15500 1 400 12500 2 800 8000 3 13000 800 4 14000 800 What is the IRR for each of these projects? If you apply the IRR decision rule, which project should the company accept? Is this decision necessarily correct?
Bruin, Incorporated, has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 −$ 28,000 −$ 28,000 1 13,400 3,800 2 11,300 9,300 3 8,700 14,200 4 4,600 15,800 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.) b-1. If the required return is 10 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.) c. At what discount rate would the company 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.)
Bruin, Inc., has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 –$ 28,700 –$ 28,700 1 14,100 4,150 2 12,000 9,650 3 9,050 14,900 4 4,950 16,500 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 Using the IRR decision rule, which project should the company accept? Project A Project B a-3 Is this decision necessarily correct? Yes No b-1 If the required return is 12 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 the company choose if it applies the NPV decision rule? Project A Project B c.…
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Bruin, Incorporated, has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 −$ 28,500 −$ 28,500 1 13,900 4,050 2 11,800 9,550 3 8,950 14,700 4 4,850 16,300 a-1. What is the IRR for each of these projects? a-2. Using the IRR decision rule, which project should the company accept? multiple choice 1 Project A Project B a-3. Is this decision necessarily correct? multiple choice 2 Yes No b-1. If 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 the company choose if it applies the NPV decision rule? multiple choice 3 Project A Project B c. At what discount rate would the company be indifferent between these two projects? (Do not round intermediate…
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Bruin, Incorporated, has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 −$ 66,000 −$ 66,000 1 42,000 28,400 2 36,000 32,400 3 24,000 38,000 4 15,200 24,400 a-1. What is the IRR for each of these projects? a-2. If you apply the IRR decision rule, which project should the company accept? b-1. Assume the required return is 12 percent. What is the NPV for each of these projects? b-2. Which project will you choose of you apply the NPV decision rule? c-1. Over what range of discount rates would you choose Project A? c-2. Over what range of discount rates would you choose Project B? d. At what discount rate would you be indifferent between these two projects?
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