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# Problem 5 18 Comparing Investment Criteria Consider the following cash flows of two mutually exclusive projects for Tokyo Rubber Company Assume the discount rate for Tokyo Rubber Company is

Problem 5-18 Comparing Investment Criteria

 Consider the following cash flows of two mutually exclusive projects for Tokyo Rubber Company. Assume the discount rate for Tokyo Rubber Company is 10 percent.

 Year Dry Prepreg Solvent Prepreg 0 Ac€?o\$ 1,730,000 Ac€?o\$ 765,000 1 1,103,000 390,000 2 906,000 630,000 3 753,000 396,000
 a. What is the payback period for both projects? (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))
 Payback period Dry Prepeg years Solvent Prepeg years

 b. What is the NPV for both projects? (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))
 NPV Dry Prepeg \$ Solvent Prepeg \$
 c. What is the IRR for both projects? (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))
 IRR Dry Prepeg % Solvent Prepeg %
 d. Calculate the incremental IRR for the cash flows. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))
 Incremental IRR %

May 21 2020 View more View Less