Garage, Inc., has identified the following two mutually exclusive projects: 
Year  Cash Flow (A)  Cash Flow (B)  
0  –$  28,000  –$  28,000  
1  13,400  3,800  
2  11,300  9,300  
3  8,700  14,200  
4  4,600  15,800  
a1 
What is the IRR for each of these projects? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) 
IRR  
Project A  %  
Project B  %  
a2 
Using the IRR decision rule, which project should the company accept? 


a3  Is this decision necessarily correct?  

b1 
If the required return is 10 percent, what is the NPV for each of these projects? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) 
NPV  
Project A  $  
Project B  $  
b2  Which project will the company choose if it applies the NPV decision rule?  

c. 
At what discount rate would the company be indifferent between these two projects? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) 
Discount rate  % 
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