Even with the explanation provided, I'm having a difficult time understanding this.

May you please clarify this using formulas and step-by-step analysis, and please use Excel as well. Thanks.

Explanation 7 Sun Lee's is considering two mutually exclusive projects that have been assigned the same discount rate of 10.5 percent. Project A has an initial cost of $54,500, and should produce cash inflows of $16,400, $28,900, and $31,700 for Years 1 to 3, respectively. Project B has an initial cost of $79,400, and should produce cash inflows of $0, $48,300, and $42,100, for Years 1 to 3, respectively. 10/10 What is the incremental IRR? points awarded Scored Multiple Choice eBook Print References -15.40 percent Explanation 0 = [-$79,400 ($0 - 16,400)/ (1 + IRR) + ($48,300 - 28,900)/ (1 IRR)2 $42,100 (-$54,500) 31,700)/(1 + IRR)3 IRR=-15.40%