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Due to a restricted budget, a company can only undertake one of the following projects: Project X: This project has an initial investment of $850,000
Due to a restricted budget, a company can only undertake one of the following projects: Project X: This project has an initial investment of $850,000 and annual profits of $400,000 in year 1, $375,000 in year 2 and $325,000 in year 3. Project Y: This project has an initial investment of $850,000 and a profit of $1,000,000 in year 3.
a. Calculate the IRR for Project X. Round to two decimal places
b. Calculate the IRR for Project Y.Round to two decimal places
c. Which project should the company undertake? X OR Y
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