Question
Riley Enterprises and Lane Industries both have new projects that require an initial investment of $130,000 and will have annual cash inflows of $45,000. If
Riley Enterprises and Lane Industries both have new projects that require an initial investment of $130,000 and will have annual cash inflows of $45,000. If Riley expects their project to last five years and Lane expects their project to last eight years, which one has the higher internal rate of return factor?
The IRR factor cannot be determined with this data.
Lane Industries
Riley Enterprises
The IRR factor will be the same for both companies.
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Management and Cost Accounting
Authors: Alnoor Bhimani, Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan
6th edition
1292063467, 978-1292063461
