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Consider the following cash flow diagram related to project ay of company X. The company in question can easily invest money at the rate of
Consider the following cash flow diagram related to project ay of company X. The company in question can easily invest money at the rate of 10% (external investing rate) and borrow money at the rate of 5% (external borrowing rate). a) Determine the maximum number of internal rate of returns (IRRs). (5 points) b) Use IRR/ERR to decide if project ay is worthwhile for company X under MARR = 6%. (25 points) (You must use gradient and annuity factors!) 500 100 300 500 3 300 8
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