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Following is information on two alternative investments being considered by Tiger Co. The company requires a 7% return from its investments. Project X1 Project X2
Following is information on two alternative investments being considered by Tiger Co. The company requires a 7% return from its investments.
Project X1 | Project X2 | |||||||||
Initial investment | $ | (106,000 | ) | $ | (172,000 | ) | ||||
Expected net cash flows in: | ||||||||||
Year 1 | 38,000 | 79,500 | ||||||||
Year 2 | 48,500 | 69,500 | ||||||||
Year 3 | 73,500 | 59,500 | ||||||||
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. (Round your answers to 2 decimal places.)
IRR Acceptable? Project X1 Project X2
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