Consider the following cash flows on two mutually exclusiveprojects for the Bahamas Recreation Corporation (BRC). Bothprojects require an annual return of 16 percent.

Year Deepwater New Sub Ride

0 −$ 995,000 −$ 1,940,000

1 415,000 990,000

2 546,000 845,000

3 465,000 840,000

a-1. Compute the IRR for both projects. (Do not roundintermediate calculations. Enter your answers as a percent roundedto 2 decimal places, e.g., 32.16.)

IRR Deepwater Fishing _____ % Submarine Ride _______ %

Calculate the incremental IRR for the cash flows. (Donot round intermediate calculations. Enter your answer as a percentrounded to 2 decimal places, e.g., 32.16.) |

Incremental IRR _______% |

## Expert Answer

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