You are a senior manager at Nittany Aircraft and have been authorized to spend up to $550,000 for projects. The three projects you are considering have the following characteristics:
Project A: Initial investment of $420,000. Cash flow of $195,000 at year 1 and $235,000 at year 2. This is a plant expansion project, where the required rate of return is 13 %.
Project B: Initial investment of $210,000. Cash flow of $180,000 at year 1 and $140,000 at year 2. This is a new product development project, where the required rate of return is 16 %.
Project C: Initial investment of $165,000. Cash flow of $145,000 at year 1 and $90,000 at year 2. This is a market expansion project, where the required rate of return is 16 %.
Assume the corporate discount rate is 17 %.
What is the IRR of project A? (Report answer in percentage terms and round to 2 decimal places. Do not round intermediate calculations)
What is the NPV of project A? (Round answer to 2 decimal places. Do not round intermediate calculations)
What is the PI of project A? (Round answer to 2 decimal places. Do not round intermediate calculations)
What is the IRR of project B? (Report answer in percentage terms and round to 2 decimal places. Do not round intermediate calculations)
What is the NPV of project B? (Round answer to 2 decimal places. Do not round intermediate calculations)
What is the PI of project B? (Round answer to 2 decimal places. Do not round intermediate calculations)
What is the IRR of project C? (Report answer in percentage terms and round to 2 decimal places. Do not round intermediate calculations)
What is the NPV of project C? (Round answer to 2 decimal places. Do not round intermediate calculations)
What is the PI of project C? (Round answer to 2 decimal places. Do not round intermediate calculations)
What is the incremental IRR (aka, crossover point) between Project B & Project C? (Report answer in percentage terms and round to 2 decimal places. Do not round intermediate calculations)