Bellinger Industries is considering two projects for inclusion in its capital budget, and you have been asked to do the analysis. Both projects' after-tax cash flows are shown on the time line below. Depreciation, salvage values, net operating working capital requirements, and tax effects are all included in these cash flows. Both projects have 4-year lives, and they have risk characteristics similar to the firm's average project. Bellinger's WACC is 9%.
0 1 2 3 4 Project A -1,000 650 320 270 390 Project B -1,000 250 255 420 840
What is Project Aâs IRR? Round your answer to two decimal places.
--------%
What is Project B's IRR? Round your answer to two decimal places.
------- %
Bellinger Industries is considering two projects for inclusion in its capital budget, and you have been asked to do the analysis. Both projects' after-tax cash flows are shown on the time line below. Depreciation, salvage values, net operating working capital requirements, and tax effects are all included in these cash flows. Both projects have 4-year lives, and they have risk characteristics similar to the firm's average project. Bellinger's WACC is 9%.
| 0 | 1 | 2 | 3 | 4 | ||||||
| Project A | -1,000 | 650 | 320 | 270 | 390 | |||||
| Project B | -1,000 | 250 | 255 | 420 | 840 | |||||
What is Project Aâs IRR? Round your answer to two decimal places.
--------%
What is Project B's IRR? Round your answer to two decimal places.
------- %
Related questions
Quantitative Problem: Bellinger Industries is considering two projects for inclusion in its capital budget, and you have been asked to do the analysis. Both projects' after-tax cash flows are shown on the time line below. Depreciation, salvage values, net operating working capital requirements, and tax effects are all included in these cash flows. Both projects have 4-year lives, and they have risk characteristics similar to the firm's average project. Bellinger's WACC is 9%.
| 0 | 1 | 2 | 3 | 4 | ||||||
| Project A | -1,100 | 600 | 390 | 270 | 320 | |||||
| Project B | -1,100 | 200 | 325 | 420 | 770 | |||||
What is Project A's payback? Round your answer to four decimal places. Do not round your intermediate calculations.
What is Project A's discounted payback? Round your answer to four decimal places. Do not round your intermediate calculations.
What is Project B's payback? Round your answer to four decimal places. Do not round your intermediate calculations.
What is Project B's discounted payback? Round your answer to four decimal places. Do not round your intermediate calculations.
