Question

Bausch Company is presented with the following two mutually exclusive projects. The required return for both projects is 17 percent. Year O-NM Project M $138,000 64,700 82,700 73,700 59.700 Project N -$367,000 146,500 192,000 131,500 122.000 a. What is the IRR for each project? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g. 32.16.) b. What is the NPV for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g. 32.16.) c. Which, if either of the projects should the company accept? b. Project M Project N Project M Project N Accept project

Answer 1

-138,000 64,700 82,700 73,700 59,700 Projects M and N Project M Cash Flows Required return IRR NPV of return 17% 36.48% 55,587.63 $ -367,000 146,500 192,000 131,500 122,000 Project N Cash Flows Required return IRR NPV of return 17% 23.46% 45,682.31 $

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