Romboski, LLC, has identified the following two mutually exclusive projects: Wha
ID: 2628932 • Letter: R
Question
Romboski, LLC, has identified the following two mutually exclusive projects:
What is the IRR for each of these projects? (Do not round intermediate calculations. Enter your answer as a percentage roundedto 2 decimal places (e.g., 32.16).)
Assume the required return is 11 percent. What is the NPV for each of these projects? (Do not round intermediate calculations.Round your answers to 2 decimal places (e.g., 32.16).)
Over what range of discount rates would you choose Project A? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)
Over what range of discount rates would you choose Project B? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)
At what discount rate would you be indifferent between these two projects? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)
Year Cash Flow (A) Cash Flow (B) 0 ?$ 55,000 ?$ 55,000 1 31,000 18,500 2 25,000 22,500 3 18,500 27,000 4 13,000 25,500Explanation / Answer
Romboski, LLC, has identified the following two mutually exclusive projects:
Year Cash Flow (A) Cash Flow (B)
0
?$ 63,000
?$ 63,000
1
39,000
25,700
2
33,000
29,700
3
22,500
35,000
4
14,600
24,700
Over what range of discount rates would you choose Project A?
Over what range of discount rates would you choose Project B?
At what discount rate would you be indifferent between these two projects?
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