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 roundedto 2 decimal places (e.g., 32.16).)

Assume the required return is 15 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. Round your answer to 2 decimal places (e.g., 32.16).)

         

Over what range of discount rates would you choose Project B? (Do not round intermediate calculations. Round your answer 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).)

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

Explanation / Answer

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).)

Using Excel Formula

Project A

IRR = irr(values)

IRR = irr({-59000,35000,29000,20500,13800})

IRR = 29.11%

Project BA

IRR = irr(values)

IRR = irr({-59000,22100,26100,31000,25100})

IRR = 26.40%

Assume the required return is 15 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).)

Project A

NPV = -59000 + 35000/1.15 + 29000/1.15^2 + 20500/1.15^3 + 13800/1.15^4

NPV = $ 14732.23

Project B

NPV = -59000 + 22100/1.15 + 26100/1.15^2 + 31000/1.15^3 + 25100/1.15^4

NPV = $ 14686.75

             

Over what range of discount rates would you choose Project A? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

         

Over what range of discount rates would you choose Project B? (Do not round intermediate calculations. Round your answer 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).)

Working

Indifference discount rate = irr({0,-12900,-2900,10500,11300})

Indifference discount rate = 14.83%

Requirement 1: (a)

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).)

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.