Question
Epsilon company is considering investing in Project X or Project Y. Project X generates the following cash flows: year zero = 339 dollars (outflow); year
Epsilon company is considering investing in Project X or Project Y. Project X generates the following cash flows: year zero = 339 dollars (outflow); year 1 = 255 dollars (inflow); year 2 = 290 dollars (inflow); year 3 = 335 dollars (inflow); year 4 = 186 dollars (inflow). Project Y generates the following cash flows: year zero = 230 dollars (outflow); year 1 = 120 dollars (inflow); year 2 = 100 dollars (inflow); year 3 = 200 dollars (inflow); year 4 = 120 dollars (inflow). The MARR is 10%. Compute the External Rate of Return (ERR) of the BEST project.
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