Question
Refer to Damon Electronics Company information below, what are the IRR of project X and the IRR of project Y? (Note: Keep your answer. There
Refer to Damon Electronics Company information below, what are the IRR of project X and the IRR of project Y? (Note: Keep your answer. There are two other related questions.)
Use the following information for the three questions referring to Damon Electronics Company:
You are a financial analyst for Damon Electronics Company. The director of capital budgeting has asked you to analyze two proposed capital investments, project X and project Y. Each project has a cost of $10,000, and the cost of capital for each project is 12%. The projects expected net cash flows are as follows:
Project X Project Y
Period Cash flows Cash flows
0 $10,000 $10,000
1 6,500 1,000
2 3,000 1,000
3 3,000 7,000
4 1,000 7,000
A. | 20.35%; 13.21% | |
B. | 18.03%; 16.61% | |
C. | 19.87%; 16.61% | |
D. | 18.03%; 15.84% | |
E. | 19.87%; 15.84% |
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