What is the IRR for each of these projects? ( Do not round intermediate calculat

Question

What is the IRR for each of these projects? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

Assume the required return is 8 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. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

Over what range of discount rates would you choose Project B? (Do not round intermediate calculations. Enter your answer as a percentage rounded 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).)

Heurich, LLC, has identified the following two mutually exclusive projects:

Explanation / Answer

Requirement A -

Answer (b) As per IRR Rule Company Should Accept Project A

Requirement (b)

Requirement (3)

(A). The Project A should be Choosen over the discount Rate of 15.385%

(B). The Project B should be Choosen over the discount Rate of 14.734%

(C) The discount Rate at which both these projects are indiffrent Are 12.29%(approx)

Project A Year Cash Flow PVF@ 15% PV PVF@20% PV 0 -90000 1 -90000 1 -90000 1 42000 0.870 36521.74 0.833 35000 2 33000 0.756 24952.74 0.694 22916.67 3 26000 0.658 17095.42 0.579 15046.30 4 21000 0.572 12006.82 0.482 10127.31 NPV 576.7204 -6909.72 IRR = 15 + (576.72/7486.44)*5 = 15.385177

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