Calculate the irr for each of the projects

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Reference no: EM131328713

William Industries is attempting to choose the better of two mutually exclusive projects for expanding the firm's production capacity. The relevant cash flows for the projects are shown in the following table. The firm's cost of capital is 15 percent.

Initial Cash Outflow(CF₀) Year(t)	Project A	Project B
Initial Cash Outflow(CF₀) Year(t)	$ 550,000	$ 358,000
	Cash Inflows
1	$110,000	$154,000
2	132,000	132,000
3	165,000	105,000
4	209,000	77,000
5	275,000	55,000

a. Calculate the IRR for each of the projects.

b. Assess the acceptability of each project based on the IRRs found in part (a).

c. Which project is preferred, based on the IRRs found in part (a).

Reference no: EM131328713

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