Question
You have four independant projects to consider investing in to improve your companies facilities. Their details are given in the following table: Cash Flows at
You have four independant projects to consider investing in to improve your companies facilities. Their details are given in the following table:
Cash Flows at the end of each year | ||||||
Alternative | 0 | 1 | 2 | 3 | 4 | 5 |
A | -$95,000 | $25,000 | $25,000 | $25,000 | $25,000 | $25,000 |
B | -$115,000 | 5,000 | 10,000 | 20,000 | 40,000 | 80,000 |
C | -$80,000 | 50,000 | 50,000 | 10,000 | 0 | 0 |
D | -$80,000 | 0 | 0 | 0 | 0 | 1,000,000 |
Using a MARR of 8%, which, if any of the above projects will your company undertake (Perform all calculations using 5 significant figures and round your answer to one decimal place)?
What is the IRR for Alternative A (round to one decimal point, e.g. 3.2%)?
Should your company invest in Alternative A
What is the IRR for Alternative B (round to one decimal point, e.g. 3.2%)?
Should your company invest in Alternative B
What is the IRR for Alternative C (round to one decimal point, e.g. 3.2%)?
Should your company invest in Alternative C
What is the IRR for Alternative D (round to one decimal point, e.g. 3.2%)?
Should your company invest in Alternative D
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started