Question

Blueprint Problems Ch 11 Brigham projects. Q Search this com Quantitative Problemsellinger Industries is considering two projects for indusion in its capital budget, and you have been asked to do the analysis. Both po r tax cash flows are shown on the time line below. Depreciation, salvage values, net operating working capital requirements, and tax effects are all din these cash flows. Both projects have 4-year lives, and they have risk characteristics similar to the firm's average project. Bellinger's WACCS HT Project A -1,300 640 540 310 310 280 Project B -1,300 240 245 What is Project A'S IRR? Do not round intermediate calculations. Round your answer to two decimal places What is Project B's IRR? Do not round intermediate calculations. Round your answer to two decimal places. If the projects were independent, which project(s) would be accepted according to the IRR method? Both projects A and B If the projects were mutually exclusive, which project(s) would be accepted according to the IRR method? Project A AOO11242 ch o Нt en

Answer 1

E29 Fax EIRR(E24:E28) F 22 year Project A 0 $ 1 $ 2 $ 3 $ 4 $ Project B (1,300.00) $ (1,300.00) 640.00 $ 240.00 310.00 $ 245.00 280.00 $ 430.00 400.00 $ 850.00 10.86% 10.69% Independent Both Projects Mutually exclusive Project A 32 33

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E29 fi =IRR(E24:E28) D Project A - 1300 640 22 23 year 24 0 25 1 26 2 27 3 28 4 29 IRR Project B -1300 240 245 310 430 280 400 =IRR(E24:E28) 850 LEIRR(F24:F28) Independent Mutually exclusive Both Projects Project A