Question

Consider the following cash flows on two mutually exclusive projects for the Bahamas Recreation Corporation (BRC)....

Consider the following cash flows on two mutually exclusive projects for the Bahamas Recreation Corporation (BRC). Both projects require an annual return of 18 percent. Year Deepwater Fishing New Submarine Ride 0 ?$ 1,035,000 ?$ 2,020,000 1 455,000 1,070,000 2 578,000 885,000 3 505,000 920,000 a-1. Compute the IRR for both projects. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places (e.g., 32.16).) IRR Deepwater Fishing % Submarine Ride % a-2. Based on the IRR, which project should you choose? Deepwater Fishing Submarine Ride b-1. Calculate the incremental IRR for the cash flows. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).) Incremental IRR % b-2. Based on the incremental IRR, which project should you choose? Submarine Ride Deepwater Fishing c-1. Compute the NPV for both projects. (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).) NPV Deepwater Fishing $ Submarine Ride $ c-2. Based on the NPV, which project should you choose? Deepwater Fishing Submarine Ride c-3. Is the NPV rule consistent with the incremental IRR rule? Yes No

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Consider the following cash flows on two mutually exclusive projects for the Bahamas Recreation Corporation (BRC)....
Consider the following cash flows on two mutually exclusive projects for the Bahamas Recreation Corporation (BRC). Both projects require an annual return of 18 percent. Year Deepwater Fishing New Submarine Ride 0 ?$ 1,040,000 ?$ 2,030,000 1 460,000 1,080,000 2 582,000 890,000 3 510,000 930,000 a-1. Compute the IRR for both projects. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places (e.g., 32.16).) IRR Deepwater Fishing % Submarine Ride % a-2. Based on...
Consider the following cash flows on two mutually exclusive projects for the Bahamas Recreation Corporation (BRC)....
Consider the following cash flows on two mutually exclusive projects for the Bahamas Recreation Corporation (BRC). Both projects require an annual return of 18 percent.    Year Deepwater Fishing New Submarine Ride 0 −$ 1,030,000 −$ 2,010,000 1 450,000 1,060,000 2 574,000 880,000 3 500,000 910,000    Compute the NPV for both projects. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)        c-2. Based on the NPV, which project should you choose?   ...
Consider the following cash flows on two mutually exclusive projects for the Bahamas Recreation Corporation (BRC)....
Consider the following cash flows on two mutually exclusive projects for the Bahamas Recreation Corporation (BRC). Both projects require an annual return of 16 percent. Year Deepwater New Sub Ride 0 −$ 995,000 −$ 1,940,000 1 415,000 990,000 2 546,000 845,000 3 465,000 840,000 a-1. Compute the IRR for both projects. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) IRR Deepwater Fishing _____ % Submarine Ride _______ % Calculate the...
NPV versus IRR Consider the following cash flows on two mutually exclusive projects for the Bahamas...
NPV versus IRR Consider the following cash flows on two mutually exclusive projects for the Bahamas Recreation Corporation. Both projects require an annual return of 15 percent. YEAR DEEPWATER FISHING NEW SUBMARINE RIDE 0 −$835,000 −$1,650,000 1 450,000 1,050,000 2 410,000 675,000 3 335,000 520,000 As a financial analyst for the company, you are asked the following questions. If your decision rule is to accept the project with the greater IRR, which project should you choose? Since you are fully...
Consider the following cash flows on two mutually exclusive projects for the Bahamas Recreation Corporation.  Both projects...
Consider the following cash flows on two mutually exclusive projects for the Bahamas Recreation Corporation.  Both projects require an annual return of 15 percent.   As a financial analyst for thecompany, you are asked the following questions. a.If your decision rule is to accept the project with the greater IRR, which project should you choose? Explain why b.  Since you are fully aware of the IRR rule's scale problem, you calculate the incremental IRR for the cash flows.  Based on your computation, which project...
ONLY NEED ANSWER TO C 1/ I know the answer to the other questions Consider the...
ONLY NEED ANSWER TO C 1/ I know the answer to the other questions Consider the following cash flows on two mutually exclusive projects for the Bahamas Recreation Corporation (BRC). Both projects require an annual return of 16 percent.    Year Deepwater Fishing New Submarine Ride 0 −$ 995,000 −$ 1,940,000 1 415,000 990,000 2 546,000 845,000 3 465,000 840,000 a-1. Compute the IRR for both projects. (Do not round intermediate calculations and enter your answers as a percent rounded...
NPV verses IRR Consider the following cash flows on the two mutually exclusive projects for the...
NPV verses IRR Consider the following cash flows on the two mutually exclusive projects for the Bahamas Recreation Corporations (BRC). Both projects require an annual return on 14% Year Deep Water  Fishing New Submarine Ride 0 -$850,000 -$1,650,000 1 320,000 810,000 2 470,000 750,000 3 410,000 690,000 a) If your decision rile is to accept the project with the greater IRR, which project should you choose? c) To be prudent, you compute the NPV for both projects. Which project should you...
Consider the following cash flows of two mutually exclusive projects for Tokyo Rubber Company. Assume the...
Consider the following cash flows of two mutually exclusive projects for Tokyo Rubber Company. Assume the discount rate for both projects is 11 percent. Year Dry Prepreg Solvent Prepreg 0 –$ 1,740,000 –$ 770,000 1 1,104,000 395,000 2 908,000 640,000 3 754,000 398,000    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.)     b. What is the NPV for both projects? (Do not round intermediate...
   Consider the following cash flows of two mutually exclusive projects for Tokyo Rubber Company. Assume...
   Consider the following cash flows of two mutually exclusive projects for Tokyo Rubber Company. Assume the discount rate for both projects is 12 percent. Year Dry Prepreg Solvent Prepreg 0 –$ 1,800,000 –$ 800,000 1 1,110,000 425,000 2 920,000 700,000 3 760,000 410,000    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.)     b. What is the NPV for both projects? (Do not round...
Garage, Inc., has identified the following two mutually exclusive projects:     Year Cash Flow (A) Cash...
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    a-1 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 %    a-2 Using the IRR decision rule, which...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT