Exercise 25-13A Internal rate of return LO P4 Following is information on two alternative investments being considered by Tiger Co. The company requires a 5% return from its investments. Project X1 Project X2 Initial investment $ (102,000 ) $ (164,000 ) Expected net cash flows in year: 1 36,000 76,500 2 46,500 66,500 3 71,500 56,500 Compute the internal rate of return for each of the projects using excel functions and based on internal rate of return, indicate whether each project is acceptable. (Round your answers to 2 decimal places.)
Exercise 25-13A Internal rate of return LO P4 Following is information on two alternative investments being considered by Tiger Co. The company requires a 5% return from its investments. Project X1 Project X2 Initial investment $ (102,000 ) $ (164,000 ) Expected net cash flows in year: 1 36,000 76,500 2 46,500 66,500 3 71,500 56,500 Compute the internal rate of return for each of the projects using excel functions and based on internal rate of return, indicate whether each project is acceptable. (Round your answers to 2 decimal places.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Exercise 25-13A Internal rate of return LO P4
Following is information on two alternative investments being considered by Tiger Co. The company requires a 5%
| Project X1 | Project X2 | |||||||||
| Initial investment | $ | (102,000 | ) | $ | (164,000 | ) | ||||
| Expected net |
||||||||||
| 1 | 36,000 | 76,500 | ||||||||
| 2 | 46,500 | 66,500 | ||||||||
| 3 | 71,500 | 56,500 | ||||||||
Compute the internal rate of return for each of the projects using excel functions and based on internal rate of return, indicate whether each project is acceptable. (Round your answers to 2 decimal places.)
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