Determine the internal rate of return, Cost Accounting

AOL is considering two proposals to overhaul its network infrastructure. They have received two bids. The first bid, from Huawei, will require a $20 million upfront investment and will generate $20 million in savings for AOL each year for the next three years. The second bid, from Cisco, requires a $100 million upfront investment and will generate $60 million in savings each year for the next three years.  

a. What is the IRR for AOL associated with each bid?   

Posted Date: 3/23/2013 5:26:40 AM | Location : United States







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