Project X Project Y

Initial investment (CF0)$400,000 $320,000

Year (t) Cash inflows (CFt)

1$110,000 $140,000

2$130,000 $140,000

3$150,000 $85,000

4$180,000 $60,000

5$240,000 $70,000

1.The

internal rate of

return(IRR) of project X is...........?%.

(Round to two decimalplaces.)

Is project X acceptable on the

basis ofIRR? (Select the best answerbelow.)

Yes or No

The internal rate of return(IRR) of project Y is %. (Round to two decimalplaces.)

Is project Y acceptable on the basis ofIRR?(Select the best answerbelow.)

No or Yes

2.Which

project ispreferred?(Select the best answerbelow.)

A. Neither B. ProjectY C. ProjectX