Following is information on two alternative investment projects being considered by Tiger Company. The company requires a 5% return from its investments. Initial investment Net cash flows in: Year 1 Year 2 Year 3 Project X1 Project X2 IRR Project X1 $ (82,000) % % 26,000 36,500 61,500 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 X2 $ (124,000) Acceptable? 61,500 51,500 41,500
Following is information on two alternative investment projects being considered by Tiger Company. The company requires a 5% return from its investments. Initial investment Net cash flows in: Year 1 Year 2 Year 3 Project X1 Project X2 IRR Project X1 $ (82,000) % % 26,000 36,500 61,500 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 X2 $ (124,000) Acceptable? 61,500 51,500 41,500
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Following is information on two alternative investment projects being considered by Tiger Company. The company requires a 5%
return from its investments.
Initial investment
Net cash flows in:
Year 1
Year 2
Year 3
Project X1
Project X2
IRR
Project X1
$ (82,000)
%
%
26,000
36,500
61,500
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 X2
$ (124,000)
Acceptable?
61,500
51,500
41,500](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4bc095e3-926a-48ec-be86-9359d4e19b6f%2Fe6a15a6b-09d7-45b6-9f51-78354afe5819%2Fhnt0m5m_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Following is information on two alternative investment projects being considered by Tiger Company. The company requires a 5%
return from its investments.
Initial investment
Net cash flows in:
Year 1
Year 2
Year 3
Project X1
Project X2
IRR
Project X1
$ (82,000)
%
%
26,000
36,500
61,500
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 X2
$ (124,000)
Acceptable?
61,500
51,500
41,500
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