P.11 NPV versus IRR. Consider the following cash flows on two mutually exclusive projects for the Ba
New Submarine Ride
As a financial analyst for BRC, 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?
b. Because you are fully aware of the IRR rule's scale problem, you calculate the incremental IRR for
c. To be prudent, you compute the NPV for both projects. Which project should you choose? Is it cons
17% Eligiria el proyecto de Deepwater Fishing p
16% Eligiria el proyecto de Deepwater Fishing p
111,152.69 Eligiria el proyecto de New Submarine Rid
P.14 Comparing Investment Criteria. Mario Brothers, a game manufacturer, has a new idea for an adv
CD-ROM, but not both. Consider the following cash flows of the two mutually exclusive pro
a. Based on the payback period rule, which project should be chosen?
b. Based on the NPV, which project should be chosen?
c. Based on the IRR, which project should be chosen?
d. Based on the incremental IRR, which project should be chosen?
P.17: Comparing Investment Criteria. The treasurer of Amaro Canned Fruits, Inc., has projected the c
Suppose the relevant discount rate is 12% a year.