Question
Epsilon company is considering investing in Project X or Project Y. Project X generates the following cash flows: year zero = 322 dollars (outflow); year
Epsilon company is considering investing in Project X or Project Y. Project X generates the following cash flows: year zero = 322 dollars (outflow); year 1 = 280 dollars (inflow); year 2 = 280 dollars (inflow); year 3 = 369 dollars (inflow); year 4 = 158 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. (note1: if your answer is 10.25% then write 10.25 as your answer, not 0.1025) (note2: round your answer to two decimal places, and do not include spaces, currency signs, plus or minus signs, or commas)
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