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Compute the irr for projects

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Reference no: EM133075732

Consider the following cash flows on two mutually exclusive projects for the bahamas recreation corporation (BRC). Both projects require an annual return of 15 percent.

Year deepwater fishing New submarine ride

0 - 960,000 -1,870,000

1 380,000 920,000

2 518,000 810,000

3 430,000 770,000

A-1. Compute the IRR for both projects

A-2. Based on the IRR, which project should you choose?

B-1. Calculate the incremental IRR for the cash flows (Do not round intermediate calculations and enter answer as a percent rounded to 2 decimal places, e.g., 32.16)

B-2. Based on the incremental IRR, which project should you choose?

C-1. Calculate the NPV for both projects. (Do not round intermediate calculations and enter answer as a percent rounded to 2 decimal places, e.g., 32.16)

C-2. Based on the NPV, which project should you choose?

C-3. is the NPV decision consistent with the incremental IRR rule (yes/no)?

Reference no: EM133075732

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