Following is information on two alternative investments being considered by Tiger Co. The company requires a 7% return from its investments. Project X1 Initial investment $(116,000) Project X2 $(192,000) Expected net cash flows in year: 1 2 3 43,000 87,000 53,500 78,500 77,000 67,000 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. (Round your answers to 2 decimal places.) IRR Acceptable? Project X1 Project X2 % %
Following is information on two alternative investments being considered by Tiger Co. The company requires a 7% return from its investments. Project X1 Initial investment $(116,000) Project X2 $(192,000) Expected net cash flows in year: 1 2 3 43,000 87,000 53,500 78,500 77,000 67,000 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. (Round your answers to 2 decimal places.) IRR Acceptable? Project X1 Project X2 % %
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Following is information on two alternative investments being considered by Tiger Co. The company requires a
7% return from its investments.
Project X1
Initial investment
$(116,000)
Project X2
$(192,000)
Expected net cash flows in year:
1
2
3
43,000
87,000
53,500
78,500
77,000
67,000
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. (Round your answers to 2 decimal places.)
IRR
Acceptable?
Project X1
Project X2
%
%
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