Two mutually exclusive projects

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Framing Hanley, LLC, has identified the following two mutually exclusive projects:

Year Cash Flow (A) Cash Flow (B) 0 –$ 50,000 –$ 50,000 1 26,000 14,000 2 20,000 18,000 3 16,000 22,000 4 12,000 26,000 What is the IRR for each of these projects? If you apply the IRR decision rule, which project should the company accept? Assume the required return is 11 percent. What is the NPV for each of these projects? Which project will you choose if you apply the NPV decision rule? ) Over what range of discount rates would you choose Project A? Over what range of discount rates would you choose Project B? ) At what discount rate would you be indifferent between these two projects?

Reference no: EM13928293

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