A firm has a capital budget of $100 which must be spent on one of two...

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Finance

A firm has a capital budget of $100 which must be spent on oneof two projects, which any unspent balance being placed in a bankdeposit earning 15%. Project A involves a present outlay of $100yields $321.76 after 5 years. Project B involves a present outlayof $40 yields $92 after one year. Calculate:
i. the IRR of each project
ii. the B/C ratio of each project, using a 15% discount rate
What are the project rankings on the basis of these investmentsdecision-rules? Suppose that if project B is undertaken its benefitcan be reinvested at 17% what project should the firm choose? Showyour calculations

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A firm has a capital budget of $100 which must be spent on oneof two projects, which any unspent balance being placed in a bankdeposit earning 15%. Project A involves a present outlay of $100yields $321.76 after 5 years. Project B involves a present outlayof $40 yields $92 after one year. Calculate:i. the IRR of each projectii. the B/C ratio of each project, using a 15% discount rateWhat are the project rankings on the basis of these investmentsdecision-rules? Suppose that if project B is undertaken its benefitcan be reinvested at 17% what project should the firm choose? Showyour calculations