Exercise $10-10$A $($Algo$)$ Using the internal rate of return to compare investment opportunities LO $10-3$

Velma and Keota $($V&K$)$ is a partnership that is considering two alternative Investment opportunitles. The first Investment opportunity

will have a three$-$year useful life, will cost $$7,162\mathrm{.}04,$ and will generate expected cash Inflows of $$3,400$ per year. The second

Investment is expected to have a useful Iffe of five years, will cost $$11,535\mathrm{.}28,$ and will generate expected cash Inflows of $$3,200$ per

year. Assume that V&K has the funds avallable to accept only one of the opportunitles. $($PV of $$1$ and PVA of $$1)$

Note: Use approprlate factor$($s$)$ from the tables provided.

Requlred

a$.$ Calculate the Internal rate of return of each Investment opportunity.

Note: Do not round Intermedlate calculations.

b$.$ Based on the internal rates of return, which opportunity should V&K select?