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What is the irr for the projects

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Chance, Inc. is considering the following two mutually exclusive projects with similar risks:

Year Project A Project B

0 -$48,000 -$48,000

1 12,520 20,990

2 13,630 16,470

3 16,470 13,630

4 20,990 12,520

(a) What is the IRR for each of the projects? If you apply the IRR decision rule, which project should the company accept?

(b) If the required rate is 12 percent, what is the NPV for each of the projects? Which project will you choose if you apply the NPV rule?

(c) Calculate the payback periods. Which project will you choose if you apply the Payback Period rule?

(d) What is your final decision? Explain.

Reference no: EM132390810

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