Piercy, LLC, has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 -$56,000 -$56000 1 32,000 19,400 2 26,000 23,400 3 19,000 28,000 4 13,200 25,400 Over what range of Discount rates would you choose Project A? Project B? (Please list percentages rounded to 2 decimal places. Hint: The answer is not the same as the IRR.) Project A ____________% Project B ____________% At what discount rate would you be indifferent between these two projects? ____________%

Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
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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Piercy, LLC, has identified the following two mutually exclusive projects:

Year Cash Flow (A) Cash Flow (B)

0

-$56,000 -$56000
1 32,000 19,400
2 26,000 23,400
3 19,000 28,000
4 13,200 25,400

Over what range of Discount rates would you choose Project A? Project B?

(Please list percentages rounded to 2 decimal places. Hint: The answer is not the same as the IRR.)

Project A ____________%

Project B ____________%

At what discount rate would you be indifferent between these two projects? ____________%

 

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