Mahjong, Inc., has identified the following two mutually exclusive projects
| Year |
Cash Flow (A) |
Cash Flow (B) |
| 0 |
'$37,300 |
'$37,300 |
| 1 |
19,660 |
7,180 |
| 2 |
15,170 |
13,680 |
| 3 |
12,660 |
20,160 |
| 4 |
9,660 |
24,160 |
|
Required:
(a) What is the IRR for Project A?
(b) What is the IRR for Project B?
(c) If the required return is 11 percent, what is the NPV for Project A?
(d) If the required return is 11 percent, what is the NPV for Project B?
(e) At what discount rate would the company be indifferent between these two projects?