Question
Question #15 : Martin Industries uses the Internal Rate of Return method and requires a return of 11%. Martin is considering the following independent projects:
Question #15: Martin Industries uses the Internal Rate of Return method and requires a return of 11%. Martin is considering the following independent projects:
| Cash Flow for | ||
| Year | Project A | Project B |
| 0 | -$157,300 | -$33,900 |
| 1 | $74,000 | $11,300 |
| 2 | $87,000 | $13,350 |
| 3 | $46,000 | $14,420 |
Required:
- Using the Internal Rate of Return method, should Martin accept or reject Project A? Project B?
- WHY?
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Cases In Financial Management
Authors: I.M. Pandey
3rd Edition
0071333428, 978-0071333429
