Cantrell Cash Flow:

Year 5, Cash Flow $12,000

Year 4, Cash Flow $12,000 Year 3, Cash Flow $11,000

Year 2, Cash Flow $11,000

Year 1, Cash Flow $10,500

Fuller Cash Flow:

Year 5, Cash Flow $15,000

year 4, Cash Flow $14,000 Year 3, Cash Flow $12,500

Year 2, Cash Flow $13,500

Year 1, Cash Flow $12,000

A home remodeling company is considering investing in two different house flips, Cantrell and Fuller. The company would like your help in determining which flip they should invest in. Use the Tableau Dashboard to assist in your analysis.

Required:

1. Calculate the internal rate of return (IRR) of each house flip.
2. Assume the company requires a return of 7 percent to invest in a project. Based on the IRR, which house(s) should the company pursue?
3. Now assume the company has does not have an internal return requirement. Which house should they select based on the IRR analysis?