You are considering two mutually exclusive projects. project a has cash flows of -$125,000, $51,400, $52,900, and $63,300 for years 0 to 3, respectively. project b has cash flows of -$85,000, $23,100, $28,200, and $69,800 for years 0 to 3, respectively. project a has a required return of 9 percent while project b’s required return is 11 percent. should you accept or reject these projects based on irr analysis?
a) accept project a and reject project b
b) reject project a and accept project b
c) accept both projects
d) reject both projects
e) you should not use irr; use a different method of analysis.

Why is efficiency an important economic goal?

Arecession is defined as a period in which

Variable rate cd’s = $90 treasury bills = $150 discount loans = $20 treasury notes = $100 fixed rate cds = $160 money market deposit accts. = $140 savings deposits = $90 fed funds borrowing = $40 variable rate mortgage loans $140 demand deposits = $40 primary reserves = $50 fixed rate loans = $210 fed funds lending = $50 equity capital = $120 a. develop a balance sheet from the above data. be sure to divide your balance sheet into rate-sensitive assets and liabilities as we did in class and in the examples. b. perform a standard gap analysis and a duration analysis using the above data if you have a 1.15% decrease in interest rates and an average duration of assets of 5.4 years and an average duration of liabilities of 3.8 years. c. indicate if this bank will remain solvent after the valuation changes. if so, indicate the new level of equity capital after the valuation changes. if not, indicate the amount of the shortage in equity capital.