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# Garage Inc has identified the following two mutually exclusive projects Year Cash Flow

Garage, Inc., has identified the following two mutually exclusive projects:

 Year Cash Flow (A) Cash Flow (B) 0 -28,400 -28,400 1 13,800 4,000 2 11,700 9,500 3 8,900 14,600 4 4,800 16,200

a1. What is the IRR for each of these projects? A =17.13 % & B=16.59%.
b1. If the required return is 12 percent, what is the NPV for each of these projects? A=2633.93 & B= 3432.15
c. At what discount rate would the company be indifferent between these two projects? (I can't figure this out! )

II

An investment has an installed cost of \$533,800. The cash flows over the four-year life of the investment are projected to be \$215,850, \$232,450, \$199,110, and \$147,820.

1.If the discount rate is infinite, what is the NPV?

2.At what discount rate is the NPV just equal to zero?

May 14 2020 View more View Less Subscribe To Get Solution