Question

URGENT!!

Here are the cash flows for two mutually exclusive projects: Ce - 27,200 C1 +$10,800 C2 +$10,800 C3 Project + 10,800 34,200 A В - 27,200 a. Given the following interest rates (0%, 2%, 4%, 6%, 8%, 10%, 12%, 14%, 16%, 18%, 20%), above what interest rates would you prefer project A to B? % Interest rates above b. What is the IRR of each project? (Round your answers to 2 decimal places.) Project B Project A IRR

Answer 1

Hello Sir/Mam

(a)Hence, INTEREST RATE ABOVE 6%, we'll prefer Project A over B

Rate		5.46%
Years	Cash Flows	PVF	PV		Years	Cash Flows	PVF	PV
0	-$27,200.00	1.000000	-$27,200.00		0	-$27,200.00	1.000000	-$27,200.00
1	$10,800.00	0.948260	$10,241.21		1		0.948260	$0.00
2	$10,800.00	0.899197	$9,711.33		2		0.899197	$0.00
3	$10,800.00	0.852672	$9,208.86		3	$34,200.00	0.852672	$29,161.40
			$1,961.40					$1,961.40

(b)

	A	B
IRR	9.28%	7.93%

I hope this solves your doubt.

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