ZuoTi.Pro
Question

WN -os Net Cash Flow Project A - $115,000 40,000 40,000 150,000 Project B - $100,000 30,000 30,000 160,000Consider two investments A and B with the sequences of cash flows given in the table below. Click the icon to view the cash fSolve Part C:

business   economics   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Incremental rate of return or incremental IRR is calculated when there are two competing projects. It is calculated as the difference between the cashflows of the two projects. It is calculated as the difference between the cashflows of the projects. The difference is because of difference in investment of the 2 projects.

The excel function is: =IRR(difference cells selected here)

the incremental IRR is calculated using IRR function in excel on the difference of cashflows. The inflows difference is postive.

the excel is shown below:

Net Cashflow
n Project A Project B Difference
0 -115000 -100000 -15000.00
1 40000 30000 10000.00
2 40000 30000 10000.00
3 150000 160000 10000.00
Incremental IRR 44.6%
0 1
Add a comment
Know the answer?
Add Answer to:
Solve Part C: WN -os Net Cash Flow Project A - $115,000 40,000 40,000 150,000 Project...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • PART A) Which project would be selected on the basis of the IRR criterion? Choose the...

    PART A) Which project would be selected on the basis of the IRR criterion? Choose the correct answer below. A. Project A B. Project B C. Project C PART B) What is the borrow rate of return (BRR) for project D? The borrowing rate of return (BRR) for project D is _ %. (Round to one decimal place) PART C) Would you accept project D at MARR = 14%? Choose the correct answer below. A. Yes B. No PART D)...

  • Consider two investments A and B with the following sequences of cash flows: Net Cash Flow...

    Consider two investments A and B with the following sequences of cash flows: Net Cash Flow Project A Project B -$111000 -$102000 22000 13000 22000 13000 111000 108000 (a) Compute the IRR for each investment. Project A: IRR = Project B: IRR = (keep 2 decimal places in numerical results) (b) At MARR = 59%, determine the acceptability of each project. Project A: Project B: (c) If A and B are mutually exclusive projects, which project is better, based on...

  • Which project would be selected on the basis of the IRR? criterion? Choose the correct answer...

    Which project would be selected on the basis of the IRR? criterion? Choose the correct answer below. Project A or Project B? Consider the two mutually exclusive investment projects given in the table below for which MARR = 12%. On the basis of the IRR criterion, which project would be selected under an infinite planning horizon with project repeatability likely? ?Click the icon to view the cash flows for the investment projects The rate of return on the incremental investment...

  • Consider the two mutually exclusive investment projects given in the table below for which MARR =...

    Consider the two mutually exclusive investment projects given in the table below for which MARR = 16%. On the basis of the IRR criterion, which project would be selected under an infinite planning horizon with project repeatability likely? Click the icon to view the cash flows for the investment projects. The rate of return on the incremental investment is % (Round to one decimal place.) n 0 Net Cash Flow Project A -- $4,000 1,500 2,500 2,500 26.23% Project B...

  • Consider the two mutually exclusive investment projects given in the table below for which MARR =...

    Consider the two mutually exclusive investment projects given in the table below for which MARR = 19%. On the basis of the IRR criterion, which project would be selected under an infinite planning horizon with project repeatability likely? Click the icon to view the cash flows for the investment projects. The rate of return on the incremental investment is %. (Round to one decimal place.) Which project would be selected on the basis of the IRR criterion? Choose the correct...

  • software company is evaluating the following projects with estimated cash flow (in $): Year (t) Project...

    software company is evaluating the following projects with estimated cash flow (in $): Year (t) Project A Project B Project C 0 -100,000 -100,000 -120,000 1 30,000 30,000 40,000 2 40,000 30,000 40,000 3 40,000 30,000 40,000 4 40,000 30,000 40,000 5 100,000 130,000 120,000 Calculate the net profit, payback period, return on investment (ROI), and net present value (NPV) of all projects. Discount rate= 3.00% a) Show your calculated discount rate and fill in the table. Project A Project...

  • Consider two investments A and B with the sequences of cash flows given in the table...

    Consider two investments A and B with the sequences of cash flows given in the table below. Click the icon to view the cash flows for the projects. (a) Compute the IRR for each investment. The rate of return for Project A is %. (Round to one decimal place.) A More Info - X WN -o Net Cash Flow Project A - $115,000 30,000 30,000 120,000 Project B - $95,000 20,000 20,000 130,000

  • The IRR-Mutually exclusive projects Bell Manufacturing is attempting to choose the better of two mutually exclusive...

    The IRR-Mutually exclusive projects Bell Manufacturing is attempting to choose the better of two mutually exclusive projects for expanding the firm's warehouse capacity. The relevant cash flows for the projects are shown in the following table: firm's cost of capital is 15% a. Calculate the IRR for each of the projects. Assess the acceptability of each project on the basis of the IRRs. b. Which project is preferred? a. The internal rate of return (IRR) of project X is %...

  • Consider the two mutually exclusive investment projects given in the table below for which MARR=11​%. On...

    Consider the two mutually exclusive investment projects given in the table below for which MARR=11​%. On the basis of the IRR​ criterion, which project would be selected under an infinite planning horizon with project repeatability​ likely? The rate of return on the incremental investment is ?% Homework: HW #7 Save Score: 0 of 1 pt 10 of 10 (8 complete) HW Score: 78.33%, 7.83 of 10 pts Problem 7-56 (algorithmic) Question Help Consider the two mutually exclusive investment projects given...

  • Garage, Inc., has identified the following two mutually exclusive projects: Year Cash Flow (A) -$ 29,300...

    Garage, Inc., has identified the following two mutually exclusive projects: Year Cash Flow (A) -$ 29,300 14,700 12.600 9,350 5,250 Cash Flow (B) $ 29,300 4,450 9,950 15,500 17,100 a-1 What is the IRR for each of these projects? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) IRR Project A Project B a-2 Using the IRR decision rule, which project should the company accept? O Project A O Project B...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT