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Following is information on two alternative investment projects being considered by Tiger Company. The company requires a 6% return from its investments. Project X1 Project
Following is information on two alternative investment projects being considered by Tiger Company. The company requires a 6% return from its investments.
Project X1 | Project X2 | |
---|---|---|
Initial investment | $ (114,000) | $ (188,000) |
Net cash flows in: | ||
Year 1 | 42,000 | 85,500 |
Year 2 | 52,500 | 75,500 |
Year 3 | 77,500 | 65,500 |
Compute the internal rate of return for each of the projects using Excel functions. Based on internal rate of return, indicate whether each project is acceptable.
Note: Round your answers to 2 decimal places.
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