Solution-Calculate the irr to the nearest whole percent of

Calculate the irr to the nearest whole percent of projects

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Reference no: EM131793972

Bell Manufacturing is attempting to choose the better of two mutually exclusive projects for expanding the firm's warehouse capacity. The relevant cash flows for the projects are shown in the following table. The firm's cost of capital is 15%.

Initial investment (CF0)	Project X	Project Y
Initial investment (CF0)	$500,000	$325,000
Year (t)	Cash inflows (CF_t)
1	$100,000	$140,000
2	120,000	120,000
3	150,000	95,000
4	190,000	70,000
5	250,000	50,000

a. Calculate the IRR to the nearest whole percent for each of the projects.
b. Assess the acceptability of each project on the basis of the IRRs found in part a.
c. Which project, on this basis, is preferred?

Reference no: EM131793972

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Calculate the irr to the nearest whole percent of projects

Reference no: EM131793972

Reference no: EM131793972

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