Solution-Determine the internal rate of return for each

Determine the internal rate of return for each project

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Reference no: EM131779993

Iggy Company is considering three capital expenditure projects. Relevant data for the projects are as follows.

Project	Investment	Annual Income	Life of Project
22A	$244,700		$17,110	6 years
23A	273,400		20,660	9 years
24A	284,800		15,700	7 years

Annual income is constant over the life of the project. Each project is expected to have zero salvage value at the end of the project. Iggy Company uses the straight-line method of depreciation.

(a) Determine the internal rate of return for each project. (Round answers 0 decimal places, e.g. 10. For calculation purposes, use 5 decimal places as displayed in the factor table provided.)

Project	Internal Rate of Return
22A	%
23A	%
24A	%

(b) If Iggy Company's required rate of return is 11%, which projects are acceptable?

Reference no: EM131779993

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Determine the internal rate of return for each project

Reference no: EM131779993

Reference no: EM131779993

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