IRR: Mutually exclusive projects IRR: Mutually exclusive projects Nile Inc. wants to choose the better of two mutually exclusive projects that expand warehouse capacity. The projects' cash flows are shown in the following table: F. The cost of capital is 15%. a. Calculate the IRR for each of the projects. Assess the acceptability of each project on the basis of the IRRs. b. Which project is preferred? a. The internal rate of return (IRR) of project X is %. (Round to two decimal places.) Is project X acceptable on the basis of IRR? (Select the best answer below.) No Yes The internal rate of return (IRR) of project Y is %. (Round to two decimal places.) Is project Y acceptable on the basis of IRR? (Select the best answer below.) No Yes b. Which project is preferred? (Select the best answer below.) A. Neither O B. Project Y O C. Project X Project X Project Y Initial investment (CFO) $500,000 $325,000 Year (t) Cash inflows (CF) 1 $100,000 $140,000 2 $120,000 $120,000 3 $150,000 $95,000 4 $190,000 $70,000 5 $250,000 $50,000