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You work for an outdoor play structure manufacturing company and are trying to decide between the following two projects: Year-End Cash Flows ($ thousands) Project
You work for an outdoor play structure manufacturing company and are trying to decide between the following two projects:
Year-End Cash Flows ($ thousands) | ||||
Project | 0 | 1 | 2 | IRR |
Playhouse (minor project) | 29 | 16 | 19 | 13.1% |
Fort (major poject) | 76 | 38 | 51 | 10.6% |
You can undertake only one project. If your cost of capital is
5%,
use the incremental IRR rule to make the correct decision.
The incremental IRR is
nothing%.
(Round to two decimal places.)
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