Using the internal rate of return to compare investment opportunities Gretchen Marlin has two alternative investment opportunities to evaluate. The first opportunity would cost $99,674.82 and generate expected cash inflows of $14,000 per year for 17 years. The second opportunity would cost $91,272.96 and generate expected cash inflows of $12,000 per year for 15 years.

Ms. Marlin has sufficient funds available to accept only one opportunity.

Required

a. Calculate the internal rate of return of each investment opportunity.

b. Based on the internal rate of return criteria, which opportunity should Ms. Marlin select?

c. Identify two other evaluation techniques Ms. Marlin could use to compare the investment opportunities