Bruin, Inc., has identified the following two mutually exclusive projects:

Year Cash Flow (A) Cash Flow (B)
0 –$28,900 –$28,900
1 14,300 4,250
2 12,200 9,750
3 9,150 15,100
4 5,050 16,700

a. What is the IRR for each of these projects?
b. Using the IRR decision rule, which project should the company accept?
i. Project A
ii. Project B

c. Is this decision necessarily correct?
d. If the required return is 10 percent, what is the NPV for each of these projects?
e. Which project will the company choose if it applies the NPV decision rule?
i. Project A
ii. Project B
f. At what discount rate would the company be indifferent between these two projects?

Neveready flashlights inc. needs $317,000 to take a cash discount of 3/15, net 70. a banker will loan the money for 55 days at an interest cost of $13,200. a. what is the effective rate on the bank loan? (use a 360-day year. do not round intermediate calculations. input your answer as a percent rounded to 2 decimal places.) b. how much would it cost (in percentage terms) if the firm did not take the cash discount but paid the bill in 70 days instead of 15 days? (use a 360-day year. do not round intermediate calculations. input your answer as a percent rounded to 2 decimal places.) c. should the firm borrow the money to take the discount? no yes d. if the banker requires a 20 percent compensating balance, how much must the firm borrow to end up with the $317,000? e-1. what would be the effective interest rate in part d if the interest charge for 55 days were $7,200?

Imagine you own an established startup with growing profits. you are looking for funding to greatly expand company operations. what method of financing would be best for you?

Winners of the georgia lotto drawing are given the choice of receiving the winning amount divided equally over 2121 years or as a lump-sum cash option amount. the cash option amount is determined by discounting the annual winning payment at 88% over 2121 years. this week the lottery is worth $1616 million to a single winner. what would the cash option payout be?