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Mahjong Inc has identified the following two mutually exclusive projects Year Cash Flow A Cash Flow

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

  

Year Cash Flow (A) Cash Flow (B)
0 Ac€?o$37,200        Ac€?o$37,200       
1 19,570        7,060       
2 15,070        13,560       
3 12,570        20,050       
4 9,570        24,050      
 

  

Required:
(a) What is the IRR for Project A?
   
 

a. 21.67%

b.22.34%

c.23.01%

d.21.22%

e.23.46%

  

(b) What is the IRR for Project B?
   
 

a. 20.86%

b. 22.16%

c.22.59%

d. 20.43%

e. 21.51%

  

(c) If the required return is 12 percent, what is the NPV for Project A?
   
 

a. $7,535.39

b. $7,315.91

c. $7,096.43

e.$7,681.71

f. $6,950.11

  

(d) If the required return is 12 percent, what is the NPV for Project B?
   
 

a. $9,942.37

b. $9,752.99

c. $9,468.92

d. $8,995.47

e. $9,184.85

  

(e) At what discount rate would the company be indifferent between these two projects?
   
 

a.18.36%

b. 19.33%

c. 19.91%

d. 20.3%

e. 18.75%

 

May 02 2020 View more View Less

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