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Two mutually exclusive projects have 3-year lives and a required rate of return of 12.5 percent. Project A costs $65,000 and has cash flows of
Two mutually exclusive projects have 3-year lives and a required rate of return of 12.5 percent. Project A costs $65,000 and has cash flows of $18,500, $42,900, and $28,600 for Years 1 to 3, respectively. Project B costs $62,000 and has cash flows of $22,000, $38,000, and $26,500 for Years 1 to 3, respectively. Using the IRR, which project, or projects, if either, should be accepted? Please show your work
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