Garage, Inc., has identified the following two mutually exclusive projects:Year-$ 29,10014,50012,4009,2505,150Cash Flow (A) Cash Flow (B)-$ 29,1004,3509,85015,30016,900a-1 What is the IRR for each of these projects? (Do not round intermediate calculations. Enter youranswers as a percent rounded to 2 decimal places, e.g., 32.16.)IRRProject A%Project B%a-2 Using the IRR decision rule, which project should the company accept?O Project AO Project Ba-3 Is this decision necessarily correct?YesNob-1 If the required return is 12 percent, what is the NPV for each of these projects? (Do not roundintermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)NPVProject A$Project B$b-2 Which project will the company choose if it applies the NPV decision rule?O Project AProject Bc. At what discount rate would the company be indifferent between these two projects? (Do not roundintermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g.,32.16.)Discount rate%eBook & ResourceseBook: 9.5. The Internal Rate of ReturnCheck my workO1234

When there is a conflict between the NPV and IRR. NPV rule will prevail.

Garage, Inc., has identified the following two mutually exclusive projects: Cash Flow (A) Cash Flow (B) -$ 29,100 14,500 12,400 9,250 5,150 Year 1 2 3 4 -$ 29,100 4,350 9,850 15,300 16,900 a-1 What is the IRR for each of these projects? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) IRR Project A % Project B %

Garage, Inc., has identified the following two mutually exclusive projects: Cash Flow (A) Cash Flow (B) -$ 29,100 14,500 12,400 9,250 5,150 Year 1 2 3 4 -$ 29,100 4,350 9,850 15,300 16,900 a-1 What is the IRR for each of these projects? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) IRR Project A % Project B %

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter9: Operating Activities

Section: Chapter Questions

Problem 18PC

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