Compute the internal rate of return

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Question - Following is information on two alternative investments being considered by Tiger Co. The company requires a 7% return from its investments.

Project X1 Project X2

Initial investment $(106,000) $(172,000)

Expected net cash flows in year:

1 38,000 79,500

2 48,500 69,500

3 73,500 59,500

Compute the internal rate of return for each of the projects using Excel functions. Based on internal rate of return, indicate whether each project is acceptable.

Reference no: EM132195411

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