Consider the following cash flows of two mutually exclusive projects for Tokyo Rubber Company. Assume the discount rate for both projects is 9 percent.
Year Dry Prepreg Solvent Prepreg
0 –$ 1,820,000 –$ 810,000
1 1,112,000 435,000
2 924,000 720,000
3 762,000 414,000
a. What is the payback period for both projects? (Do not round intermediate calculations. Round your answers to 2 decimal places, e.g., 32.16.)
Payback period
Dry Prepeg years
Solvent Prepeg years
b. What is the NPV for both projects? (Do not round intermediate calculations. Round your answers to 2 decimal places, e.g., 32.16.)
NPV
Dry Prepeg $
Solvent Prepeg $
c. What is the IRR for both projects? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
IRR Dry Prepeg %
Solvent Prepeg %
d. Calculate the incremental IRR for the cash flows. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Incremental IRR %