Solution-What is the internal rate of return for Project A

What is the internal rate of return for Project A

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Question - Analyse the following mutually exclusive projects that each require an initial investment of $11,000. The cost of capital is 17% pa effective.

Project	Year 1	Year 2	Year 3	Year 4	Year 5
A	4,000	4,000	4,000	4,000	4,000
B	0	0	0	0	22,000

a) Calculate the net present value for Project A. Give your answer in dollars and cents to the nearest cent.

b) What is the internal rate of return for Project A? You may give your answer as a percentage per annum to the nearest percent or use linear interpolation or a financial calculator to give a more accurate result.

c) Calculate the net present value for Project B. Give your answer in dollars and cents to the nearest cent.

d) What is the internal rate of return for Project B? You may give your answer as a percentage per annum to the nearest percent or use linear interpolation or a financial calculator to give a more accurate result.

e) Which project(s) would you recommend?

Reference no: EM133061557

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What is the internal rate of return for Project A

Reference no: EM133061557

Reference no: EM133061557

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