What is incremental irr of two mutually exclusive projects

Assignment Help Financial Management
Reference no: EM131085602

Project A costs $84,500 and has cash flows of $32,300, $36,400, and $30,000 for Years 1 to 3, respectively. Project B has an initial cost of $79,000 and has cash flows of $30,000, $36,000, and $29,000 for Years 1 to 3, respectively. What is the incremental IRR of these two mutually exclusive projects?

Reference no: EM131085602

Questions Cloud

Bonds outstanding with six months left to maturity : Badger Corp. has an issue of 6% bonds outstanding with 6 months left to maturity. The bonds are currently priced at $1003. The firm's marginal tax rate is 40%. The estimated risk premium between the company's stock and bond returns is 6%. The firm's ..
Operating profit margin-what is the return on equity : Keller Cosmetics maintains an operating profit margin of 8.95% and a sales-to-assets ratio of 3.80. It has assets of $690,000 and equity of $490,000. Interest payments are $49,000 and the tax rate is 30%. What is the return on Equity?
Net cash from operations increaed : Net cash from operations increaed, yet cash as reported on the balance shee decresed. Which of the following factors could explain this situation? INC. has a current ratio equal to 1.4 which of the following transaction will increase the company curr..
Shares of common stock outstanding at price per share : Western Electric has $23,000 shares of common stock outstanding at a price per share of $57 and a rate return of 14.2 percent. the firm has 6,000 shares of 7 percent preferred stock outstanding $48 a share. The amount of outstanding debt 357,000. The..
What is incremental irr of two mutually exclusive projects : Project A costs $84,500 and has cash flows of $32,300, $36,400, and $30,000 for Years 1 to 3, respectively. Project B has an initial cost of $79,000 and has cash flows of $30,000, $36,000, and $29,000 for Years 1 to 3, respectively. What is the incre..
What is the total amount you must pay for the bond : You purchase a $1,000 par value, 6% annual coupon rate bond for the price of $960 on 4/26/2016. ?The most recent interest payment was on 12/01/2015 and the next interest payment is scheduled for 06/01/2016. ?What is the total amount you must pay for ..
Major risk of government reliant on short term financing : What is the major risk of a government being reliant on short term financing?
Appropriate analysis is to calculate future value of option : Ben Bates graduated from college six years ago with a ?nance undergraduate degree. Although he is satis?ed with his current job, his goal is to become an investment banker. He feels that an MBA degree would allow him to achieve this goal. What other,..
Determine the required rate of return for chase : Look up the beta coefficient for JP Morgan Chase. In addition, look up the present 10 year t-Note rate. Assuming a 5.6 percent equity risk premium, determine the required rate of return for Chase. Using the required rate of return, determine what you..

Reviews

Write a Review

Financial Management Questions & Answers

  As the cost of capital increases

As the cost of capital increases,

  Expected interest rate

The real risk-free rate is 2.8%. Inflation is expected to be 2.85% this year, 4.75% next year, and then 3.3% thereafter. The maturity risk premium is estimated to be 0.05(t - 1)%, where t = number of years to maturity. What is the yield on a 7-year T..

  Discount rate-calculate the net present value-payback

Using a 4.5% discount rate, calculate the Net Present Value, Payback, Profitability Index, and IRR for each of the investment projects below (note, the inflows are for each year). Based on your calculations rank the projects and support you answer. A..

  Investment in operating capital

Free Cash Flow Tater and Pepper Corp. reported free cash flows for 2015 of $39.1 mil- lion and investment in operating capital of $22.1 million. Tater and Pepper incurred $13.6 million in depreciation expense and paid $28.9 million in taxes on EBIT i..

  What is the amount of the after-tax annual interest payment

The June Bug has a $16,000,000 bond issue outstanding. These bonds have a 7 percent coupon, pay interest semi annually in perpetuity, and have a current market price equal to 98.6 percent of face value. The tax rate is 39 percent. What is the amount ..

  Main types of bonuses common in executive compensation

Discuss the three main types of bonuses common in executive compensation. Please discuss in detail and provide examples of each type of bonus.

  Equilibrium effects of expansionary monetary policy

What are the short run equilibrium effects of expansionary monetary policy in the DD-AA model? Make sure to analyze both temporary and permanent changes in monetary policy. What is the difference between these two scenarios with respect to equilibriu..

  Shares of stock will be outstanding after the split

Della's Pool Halls has 12,000 shares of stock outstanding with a par value of $1 per share and a market price of $39 a share. The firm just announced a 4-for-3 stock split. How many shares of stock will be outstanding after the split?

  Initial fixed asset investment-equivalent annual cost

A five-year project has an initial fixed asset investment of $325,000, an initial NWC investment of $33,000, and an annual OCF of −$32,000. The fixed asset is fully depreciated over the life of the project and has no salvage value. If the required re..

  Calculate the net present value of the new purchase option

David Co. produces all-terrain vehicles (ATVs). The once successful line is no longer selling well, so the company is considering production of a new improved 4 passenger ATV. This can be done by buying needed production equipment. The after tax cash..

  What was its interest expense

Molteni Motors Inc. recently reported $3.25 million of net income. Its EBIT was $7.75 million, and its tax rate was 35%. What was its interest expense? Round your answer to the nearest dollar. Enter your answer in dollars. For example, an answer of $..

  All transaction-related costs

Grant purchased one call on XYZ stock at an exercise price of $25. The market price of XYZ stock when Grant purchased the call was $24 a share. XYZ is currently priced at $30 a share. Grant paid $120 to buy the call. How much profit will Grant make i..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd