Question
Consider the following set of investment projects, all of which have a three-year investment life: The three projects are mutually exclusive investments and MARR=10%, Project
Consider the following set of investment projects, all of which have a three-year investment life:
The three projects are mutually exclusive investments and MARR=10%,
| Project Cash Flows | |||
| n | A | B | C |
| 0 | -1500 | -600 | -60 |
| 1 | 500 | 200 | -400 |
| 2 | 1485 | 735 | 720 |
| IRR | 18% | 29% | |
(a) What is the rate of return of project C?
(b) Using IRR analysis, determine which project should be selected.
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Contemporary Economics An Applications Approach
Authors: Robert Carbaugh
8th Edition
1138652199, 978-1138652194
