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Which project should the company accept

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Question - Gordon Growth company has identified the two mutually projects. Both project A and B have initial cash outlay of $37,500 and both projects have four years lives. Cash inflows from project A and B over their four years lives are as follows:

Project A: 1st year = $17,300; 2nd year = $16,200; 3rd year = $13,800, 4th year = $7,600

Project B: 1st year = $5,700; 2nd year = $12,900; 3rd year = $16,300, 4th year = $27,500

Using IRR decision rule, which project should the company accept?

Reference no: EM133033687

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