Consider the following cash flows on two mutually exclusive projects for the Bahamas Recreation Corporation. Both...

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Finance

Consider the following cash flows on two mutually exclusiveprojects for the Bahamas Recreation Corporation. Both projectsrequire an annual return of 17 percent.
Year Deepwater Fishing New Submarine Ride
0 ?$ 1,000,000 ?$ 1,950,000
1 420,000 1,000,000
2 550,000 850,000
3 470,000 850,000
(A) Compute the IRR for both projects. Based on IRR, whatproject should I choose?
(B) Calculate the incremental IRR for cash flows. Based onincremental IRR, what project should I choose?
(C) Compute the NPV for both projects. Based on NPV, what projectshould I choose?

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Consider the following cash flows on two mutually exclusiveprojects for the Bahamas Recreation Corporation. Both projectsrequire an annual return of 17 percent.YearDeepwater FishingNew Submarine Ride0?$1,000,000?$1,950,0001420,0001,000,0002550,000850,0003470,000850,000(A) Compute the IRR for both projects. Based on IRR, whatproject should I choose?(B) Calculate the incremental IRR for cash flows. Based onincremental IRR, what project should I choose?(C) Compute the NPV for both projects. Based on NPV, what projectshould I choose?

Year	Deepwater Fishing		New Submarine Ride
0	?$	1,000,000	?$	1,950,000
1		420,000		1,000,000
2		550,000		850,000
3		470,000		850,000