Exercise 25-13A Internal rate of return LO P4

Following is information on two alternative investments being considered by Tiger Co. The company requires a 8% return from its investments.

	Project X1					Project X2
Initial investment		$	(108,000	)			$	(176,000	)
Expected net cash flows in year:
1			39,000					81,000
2			49,500					71,000
3			74,500					61,000

Compute the internal rate of return for each of the projects using excel functions and based on internal rate of return, indicate whether each project is acceptable. (Round your answers to 2 decimal places.)

IRR Acceptable? Project X1 Project X2 0 0