Bookmark Zayas, LLC, has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 -$ 51,000 -$ 51, XXXXXXXXXX,000 14, XXXXXXXXXX,000 18, XXXXXXXXXX,500 23,...

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Zayas, LLC, has identified the following two mutually exclusiveprojects:

YearCash Flow (A)Cash Flow (B)
0-$51,000-$51,000
127,00014,900
221,00018,900
316,50023,000
412,20025,900


a. What is the IRR for each of theseprojects?

Internal rate of return
Project A____________%
Project B____________%

If you apply the IRR decision rule, which project shouldthe company accept? Project B or Project A

b. Assume the required return is 10percent. What is the NPV for each of these projects?

Net present value
Project A____________$
Project B____________$

Which project will you choose if you apply the NPVdecision rule? Project A or Project B

c. Over what range of discount rates wouldyou choose Project A?

Project A  Belowor Above? _________%

Over what range of discount rates would you choose ProjectB?

Project B Above or Below? _________%


At what discount rate would you be indifferent betweenthese two projects?

Discount rate_________%

May 14, 2022
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