Dark Skies Observatory is considering several options to purchase a new deep-space telescope. Revenue would be generated from the telescope by selling time and use slots to various researchers around the world. Four possible telescopes have been identified in addition to the possibility of not buying a telescope if none are financially attractive. The table below details the characteristics of each telescope. An internal rate of return analysis is to be performed.

The following spreadsheet has been developed to solve for the incremental internal rate of return for the comparison of the smallest initial cost alternative T3 (challenger) with the null alternative (defender). Complete the missing information in the table.

What is the incremental IRR for the incremental cash flow? IRR = ___________ % Do all calculations to 5 decimal places and round final answer to 2 decimal places. The tolerance is +/- 0.02. If entering a negative number use the (-) sign.

T1 T2 T3 T4 Useful Life 10 years 10 years 10 years 10 years First Cost $640,000 $980,000 $410,000 $620,000 Salvage Value $80,000 $140,000 $60,000 $215,000 Annual Revenue $400,000 $600,000 $260,000 $320,000 Annual Expenses $150,000 $310,000 $50,000 $80,000 End of Year (EOY) Net Cash Flow (NCF) for challenger T3 Net Cash Flow (NCF) for defender (null alternative) Incremental Cash Flow (INCR, CF) 0 $ 0 $0 1-9 $ $0 10 $ $0