Iggy Company is considering three capital expenditure projects. Relevant data for the projects are as follows.

ProjectInvestmentAnnual

IncomeLife of

Project22A$240,500$16,8806years23A272,70020,6209years24A280,50015,7007years

Annual income is constant over the life of the project. Each project is expected to have zero salvage value at the end of the project. Iggy Company uses the straight-line method of depreciation.

Click here to view the factor table.

(a)

Determine the internal rate of return for each project.(Round answers 0 decimal places, e.g. 13%. For calculation purposes, use 5 decimal places as displayed in the factor table provided.)

ProjectInternal Rate of

Return

22A%

23A%

24A%

(b)

If Iggy Company's required rate of return is11%, which projects are acceptable?

The following project(s) are acceptable

22A and 24A

23A

22A, 23A and 24A

22A and 23A

23A and 24A

22A

24A