Consider the following cash flows on two mutually exclusive projects for the B.C. Recreation Corporation (BCRC). Both projects requirean annual return of 13 percent.aw BubmarineRide- 51,950, D0Year Deupvater Fishing-5530,000230,0001,150, D00000 ,39ב700, D00250,000790, DD0As a financial analyst for BCRC, you are asked to answer the following questions:a-1. Calculate the IRR for both projects. (Do not round Intermediate calculations. Round the answer to 2 decimal places.)Deepvater FinhingNuw Subnarine Ridea-2. If your decision rule is to accept the project with the greater IRR, which project should you choose?O Deepwater FishingO New Submarine Rideb-1. Calculate the incremental IRR for the projects. (Do not round intermediate calculations. Round the answer to 2 decimal places.)Incremental IRRb-2. Because you are fully aware of the IRR rule's scale problem, you calculate the incremental IAR for the cash flows. Based on yourcomputation, which project should you choose?O Deepwater FishingO New Submarine Ridec-1. Compute the NPV for both projects. (Do not round intermediate calculations. Round the answers to 2 decimal places.)Deepvater FishingNuw Subnarine Ridec-2. Which project should you choose?O Deepwater FishingO New Submarine Ridec-3. is it consistent with the incremental IRR rule?O Yes, always consistentO No, always inconsistent

Since you have asked a question with multiple parts, we will solve the first 3 parts for you as per…

Consider the following cash flows on two mutualy exclusive projects for the BC. Recreation Corporation (BCRC. Both projects require an annual return of 13 percent. wnarine Ride Tear beepater Fiahing 700,00 As a financial analyst for BCRC. you are asked to answer the following questions: at Calculate the RR for both projects. (Do not round intermediate calculations. Round the answer to 2 decimal places) Deepuater Piahing ew uarine Rid •2.H your decision nue is to accept the project with the greater IRR, which project shouid you choose? O Deepwater Fishing ONew Submarine Ride D1 Calculate the incremental IRR for the projects. (Do not round intermediate calculations. Round the answer to 2 decimal places) Incremental RR b2. Because you are fuly aware of the RR nule's scale problem, you calculate the incremental RR for the cash flows. Based on your computation, which project should you choose? O Deepwater Fishing O New Submarine Ride 1 Compute the NPV for both projects. (Do not round intermediate calculations. Round the answers to 2 decimal places) Beeprater Fiahing Hew Sunarine ide c2 Which project should you choose? O Deepwater Fishing O New Submarine Ride et consistent with the incremental IRR rule? O Yes, always cosistent ONo, always inconsistent

Consider the following cash flows on two mutualy exclusive projects for the BC. Recreation Corporation (BCRC. Both projects require an annual return of 13 percent. wnarine Ride Tear beepater Fiahing 700,00 As a financial analyst for BCRC. you are asked to answer the following questions: at Calculate the RR for both projects. (Do not round intermediate calculations. Round the answer to 2 decimal places) Deepuater Piahing ew uarine Rid •2.H your decision nue is to accept the project with the greater IRR, which project shouid you choose? O Deepwater Fishing ONew Submarine Ride D1 Calculate the incremental IRR for the projects. (Do not round intermediate calculations. Round the answer to 2 decimal places) Incremental RR b2. Because you are fuly aware of the RR nule's scale problem, you calculate the incremental RR for the cash flows. Based on your computation, which project should you choose? O Deepwater Fishing O New Submarine Ride 1 Compute the NPV for both projects. (Do not round intermediate calculations. Round the answers to 2 decimal places) Beeprater Fiahing Hew Sunarine ide c2 Which project should you choose? O Deepwater Fishing O New Submarine Ride et consistent with the incremental IRR rule? O Yes, always cosistent ONo, always inconsistent

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 7PA: There are two projects under consideration by the Rainbow factory. Each of the projects will require...

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