The answer to this question involves IRR=15% and IRR=13%. Please try to answer it without an excel function because we dont get to use those! Im not sure how to answer this question, so please help!

Question 2 gement is considering two very different approaches to manufacturing its new product line but will have equal functionality as both Mana not launch the new product line unless it is profitable. Both approaches alternatives will allow for end-of-year sales of $800 000 (in constant dollars. years. The an maint of labour have calculated the depreciation the economic lif estimates (using EOY O prices for all estimates) for the two alternative e capital-intensive approach requires far more expensive equipment but will have operating and enance costs (O &M Costs) that are significantly lower due to the savings in the reduced amount required. The project engineers have followed the advice of the Accounting Department and annual depreciation cost (Depr. Cost) of all equipment on a straight-line basis over e of the equipment. The project engineers have prepared the following financial Capital Intensive Alternative Labour Intensive Alternative (EOY 0 Prices) (EOY0 Prices) O & MDepr Costs O&M Depr Costs EOY, Cost Cost 1S185 000 $388 333 2 S185 000 $388 333 3 S185 000 $388 333 4 S185 000 $388 333 5 S185 000 $388 333S 6 S185 000 $388 333 1$450 000 $215 196 2$450 000 $215 196 3 $450 000 $215 196 4 $450 000 $215 196 5 $450 000 $215 196 S450 000 $215196 Capital Intensive Alternative Labour Intensive Alternative Equipment Purchase Price Salvage Value Economic Life (EOY 0 Prices) S2 430 000 $100 000 6 years (EOY 0 Prices) $1 350 000 $58 825 6 years Management has determined that a 6-vear planning period is appropriate and that it will not proceed with the new product line if it is not profitable. Engineers have prepared all financial using EOY 0 prices. The real A Rs12%. The annual inflation rate is estimated to be a con tant2%over the 6-year planning ri Make a recommendation to management as to how to proceed. Management requires the Internal Rate of Return rounded to the nearest integer method for evaluating projects of this nature and requests that you provide the relevant IRRs) [91 For full credit, you must fully explain the reasoning behind your approach nd outline in words the steps in your project financial analysis