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Two capital investments are under consideration. Excel has been used to calculate the internal rate of return for each, with the results below: A B

Two capital investments are under consideration. Excel has been used to calculate the internal rate of return for each, with the results below:

A

B

1

-90,000

-90,000

2

32,000

29,000

3

25,000

26,000

4

26,000

24,000

5

24,000

24,000

6

27,000

19,000

7

15%

12%

If the company's hurdle rate is 14%, which of the following is true?

Group of answer choices

Only proposal A should be accepted.

Both proposal A and proposal B should be accepted.

Both proposal A and proposal B should be rejected.

Only proposal B should be accepted.

A capital investment under consideration requires an initial investment of $100,000. The asset purchased will be used for 5 years. Depreciation is computed using straight-line, with no residual value. Income from operations, depreciation expense, and net cash inflows for each of the five years is:

Year

Net cash inflows

1

$40,000

2

35,000

3

55,000

4

80,000

5

62,000

Which is the correct way to enter this information into an Excel spreadsheet to compute internal rate of return?

Group of answer choices

A

1

-100,000

2

40,000

3

35,000

4

55,000

5

80,000

6

62,000

A

1

40,000

2

35,000

3

55,000

4

80,000

5

62,000

6

100,000

A

1

100,000

2

-40,000

3

-35,000

4

-55,000

5

-80,000

6

-62,000

A

1

62,000

2

80,000

3

55,000

4

35,000

5

40,000

6

0

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