N62 AB D E F H K M Points 58 59 60 57 Requirements 1 In cell E23, by using cell references to the given data and the function IRR, calculate the internal rate of return for project A. 2 In cell F24, by using cell reference to the calculated data, provide the maximum cost of capital for project A to be acceptable. 3 In cell E33, by using cell references to the given data and the function IRR, calculate the internal rate of return for project B. 4 In cell F34, by using cell reference to the calculated data, provide the maximum cost of capital for project B to be acceptable. 5 In cell E43, by using cell references to the given data and the function IRR, calculate the internal rate of return for project C. 6 In cell F44, by using cell reference to the calculated data, provide the maximum cost of capital for project to be acceptable. 7 In cell E53, by using cell references to the given data and the function IRR, calculate the internal rate of return for project D. 8 In cell F54. by using cell reference to the calculated data, provide the maximum cost of capital for project D to be acceptable. 9 Save the workbook. Close the workbook and then exit Excel. Submit the workbook as directed. 61 62 1 63 1 65 66 67 Problem 10-14 2 Internal rate of return. For each of the projects shown in the following table, calculate the internal rate of return (IRR). Then indicate, for each project, the maximum cost of capital that the firm could have and still find the IRR 3 4 5 Project D -$ 240,000 6 7 B Project A Project B Project C Initial investment -590,000 -5 490,000 -$ 20,000 Year Cash inflows 1 $ 20,000 $ 150,000 S 7,500 2 25,000 150,000 7,500 3 30,000 150.000 7,500 4 35,000 150,000 7,500 5 40.000 7.500 S 9 20,000 100,000 80,000 60,000 11 12 13 Solution 14 15 16 17 16 Project A CF, CF -$ 90,000 $ 20.000 Problem 10-14 + Calculation Mode Automatic Workbook Stati N62 K F A F - H c B M G D 16 18 19 20 999 Project A -$ 90,000 $ 20,000 $ 25,000 CF S 30,000 CE $ 35,000 CES $ 40.000 IRR If the firm's cost of capital is below 21 22 23 24 25 26 the project would be acceptable. 27 28 30 31 Project B CF S 490.000 CE $ 150,000 CE $ 150.000 CF S 150.000 S 150.000 CFS $ IRR If the firm's cost of capital is below CF4 33 34 the project would be acceptable. 15 C F G H CF AB E 36 Project C 37 CF -$ 20,000 38 CE $ 7,500 79 CE $ 7,500 40 7.500 41 CF $ 7,500 42 CES $ 7,500 43 IRR 44 If the firm's cost of capital is below 45 46 Project D CF -S 240.000 48 CF, $ 120,000 49 CE2 $ 100,000 50 CE $ 80.000 51 , $ 60,000 57 CES S 53 IRR 51 If the firm's cost of capital is below 55 the project would be acceptable. the project would be acceptable. Problem 10-14 + Calculation Mode: Automatic Workbook Statistics