Question
Based on the cash flow shown over 10 years for three projects, which should be selected using the concept of IRR and Delta IRR? MARR
Based on the cash flow shown over 10 years for three projects, which should be selected using the concept of IRR and Delta IRR?
| MARR | 14% | ||
| Year | Project P | Project Q | Project R |
| 0 | $ (29,200.00) | $(44,400.00) | $(67,800.00) |
| 1 | $ 6,200.00 | $ 8,825.00 | $ 13,825.00 |
| 2 | $ 8,200.00 | $ 10,825.00 | $ 16,825.00 |
| 3 | $ 10,200.00 | $ 12,825.00 | $ 18,825.00 |
| 4 | $ 12,200.00 | $ 14,825.00 | $ 20,825.00 |
| 5 | $ (31,120.00) | $ 11,825.00 | $(24,815.00) |
| 6 | $ 12,504.00 | $ (1,244.44) | $ 14,825.00 |
| 7 | $ 12,504.00 | $ 6,618.88 | $ 16,825.00 |
| 8 | $ 12,504.00 | $ 7,030.77 | $ 18,825.00 |
| 9 | $ 12,504.00 | $ 7,483.84 | $ 20,825.00 |
| 10 | $ 12,504.00 | $ 7,982.23 | $ 22,825.00 |
| Possible answers: First project, | ||
| Second project, | ||
| Third project, or | ||
| None. All should be rejected? |
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GAO Financial Audit Manual Volume 1 Updated April 2020
Authors: United States Government GAO
2020 Edition
B091PR8396, 979-8733135977
