Following is information on two alternative investment projects being considered by Tiger Company. The company requires a 7% return from its investments. Initial investment Net cash flows in: Project X1 Project X2 $ $ (86,000) (132,000) Year 1 28,000 64,500 Year 2 38,500 54,500 Year 3 63,500 44,500 Compute the internal rate of return for each of the projects using Excel functions. Based on internal rate of return, indicate whether each project is acceptable. Note: Round your answers to 2 decimal places. Project X1 Project X2 IRR % % Acceptable?
Following is information on two alternative investment projects being considered by Tiger Company. The company requires a 7% return from its investments. Initial investment Net cash flows in: Project X1 Project X2 $ $ (86,000) (132,000) Year 1 28,000 64,500 Year 2 38,500 54,500 Year 3 63,500 44,500 Compute the internal rate of return for each of the projects using Excel functions. Based on internal rate of return, indicate whether each project is acceptable. Note: Round your answers to 2 decimal places. Project X1 Project X2 IRR % % Acceptable?
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 7PA: There are two projects under consideration by the Rainbow factory. Each of the projects will require...
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![Following is information on two alternative investment projects being considered by Tiger Company. The company
requires a 7% return from its investments.
Initial investment
Net cash flows in:
Project X1 Project X2
$
$
(86,000)
(132,000)
64,500
Year 1 28,000
Year 2 38,500
54,500
Year 3 63,500
44,500
Compute the internal rate of return for each of the projects using Excel functions. Based on internal rate of return,
indicate whether each project is acceptable.
Note: Round your answers to 2 decimal places.
Project
X1
Project
X2
IRR
%
%
Acceptable?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F04498226-4cc2-421f-bd0f-2925fb905a28%2F38d8370f-ffcb-4e20-a867-bcb08417d400%2Femz8w7_processed.png&w=3840&q=75)
Transcribed Image Text:Following is information on two alternative investment projects being considered by Tiger Company. The company
requires a 7% return from its investments.
Initial investment
Net cash flows in:
Project X1 Project X2
$
$
(86,000)
(132,000)
64,500
Year 1 28,000
Year 2 38,500
54,500
Year 3 63,500
44,500
Compute the internal rate of return for each of the projects using Excel functions. Based on internal rate of return,
indicate whether each project is acceptable.
Note: Round your answers to 2 decimal places.
Project
X1
Project
X2
IRR
%
%
Acceptable?
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