Answer:
Year Cash Flow (A) Cash Flow (B)
0 -37,500 -37,500
1 17,300 5,700
2 16,200 12,900
3 13,800 16,300
4 7,600 27,500
1) Using an excel spreadsheet and the IRR function:
IRR project A = 20%
IRR project B = 19%
2) Using the IRR decision rule, Bruin should choose project A.
3) In this case, since the length of the projects is only 4 years, then there should be no problem with the IRR decision rule, but for projects with longer time lengths, the discounts rates might vary and the best option is to use the modified internal rate of return (MIRR). But in this case the NPV of project B is higher, then Bruin should probably project B because it has a higher NPV. The NPV is always more important then the IRR.
4) Again using an excel spreadsheet and the NPV function:
NPV project A = $6,331
NPV project B = $8,139
5) first we must subtract cash flows from A by the cash flows from B:
1 $11,600
2 $3,300
3 -$2,500
4 -$19,900
then we calculate the IRR = 16%
Bruin should be indifferent between the two projects at a 16% discount rate. That means that at discount rates above 16%, you should choose project A, but at discount rates below 16%, you should choose project B
Answer:
agriculture
Explanation:
because they study plants/geology
Answer:
$254,010
Explanation:
Calculation for the total shareholders' equity at the end of 2021
Issue of stock (10,700 × $5.90) $63,130
Issue of stock (20,600 × $8.80) $181,280
Net income $95,000
Less Dividends( $53,000)
Less Treasury stock (3,000 × $10.80) ($32,400)
Total shareholders' equity $254,010
Therefore the total shareholders' equity at the end of 2021 is $254,010
