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Sweet Acacia Company is considering two capital expenditures. Relevant data for the projects are as follows: Project Initial investment Annual cash inflow Life of
Sweet Acacia Company is considering two capital expenditures. Relevant data for the projects are as follows: Project Initial investment Annual cash inflow Life of project Salvage value $218.669 $42.000 Project A 7 years. $0 Sweet Acacia Company uses the straight-line method to depreciate its assets. Project B B $282.249 $49,010 9 years $0 Calculate the internal rate of return for each project. (For calculation purposes, use 5 decimal places as displayed in the factor table provided, e.g. 1.25125. Round answers to O decimal places, e.g. 15%.) Click here to view the factor table. Internal rate of return % %
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SOLUTION To calculate the internal rate of return IRR for each project we can use the formula IRR CF1 1 r1 CF2 1 r2 CFn 1 rn Initial Investment where CF1 CF2 CFn are the annual cash inflows for each y...Get Instant Access to Expert-Tailored Solutions
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