Consider the following cash flows of two mutually exclusive projects. Year Project A Cash Flow Project B Cash Flow (118,000) (12,000) 1 18,900 1,243 54,728 2,455 3 57,575 2,224 4 73,737 3,543 85,868 7,643 93,992 4,543 The required rate of return for both projects is 12% Blank #1: What is the IRR for A? Blank #2: What is the IRR for B? Blank #3: What is the NPV for A?

Financial And Managerial Accounting
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Author:WARREN, Carl S.
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Chapter26: Capital Investment Analysis
Section: Chapter Questions
Problem 2CMA: Staten Corporation is considering two mutually exclusive projects. Both require an initial outlay of...
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Consider the following cash flows of two mutually exclusive projects.
Year
Project A Cash Flow
Project B Cash Flow
(118,000)
(12,000)
18,900
1,243
2
54,728
2,455
57,575
2,224
4
73,737
3,543
85,868
7,643
6.
93,992
4,543
The required rate of return for both projects is 12%
Blank #1: What is the IRR for A?
Blank #2: What is the IRR for B?
Blank #3: What is the NPV for A?
Blank #4: What is the NPV for B?
Blank #5: Based on your previous answers, which project will you finally choose?
(Instruction: Type A or B)
Instruction: Round answers to 02 decimal places, include numbers only for blank #1
through #4. Answer in the order of questions asked.
Transcribed Image Text:Consider the following cash flows of two mutually exclusive projects. Year Project A Cash Flow Project B Cash Flow (118,000) (12,000) 18,900 1,243 2 54,728 2,455 57,575 2,224 4 73,737 3,543 85,868 7,643 6. 93,992 4,543 The required rate of return for both projects is 12% Blank #1: What is the IRR for A? Blank #2: What is the IRR for B? Blank #3: What is the NPV for A? Blank #4: What is the NPV for B? Blank #5: Based on your previous answers, which project will you finally choose? (Instruction: Type A or B) Instruction: Round answers to 02 decimal places, include numbers only for blank #1 through #4. Answer in the order of questions asked.
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