Iggy Company is considering three capital expenditure projects. Relevant data for the projects are as follows. Project Investment 22A $243,000 270,900 23A 24A 283,300 (a) Annual Income $16,720 20,620 15,700 Life of Project 6 years 9 years 7 years Annual income is constant over the life of the project. Each project is expected to have zero salvage value at the end of the project. Iggy Company uses the straight-line method of depreciation Click here to view the factor table

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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am .103.

Iggy Company is considering three capital expenditure projects. Relevant data for the projects are as follows.
Life of
Project
Project Investment
22A
$243,000
270,900
283,300
23A
24A
Annual
Income
(a)
$16,720
20,620
15,700
6 years
9 years
7 years
Annual income is constant over the life of the project. Each project is expected to have zero salvage value at the end of the project. Iggy
Company uses the straight-line method of depreciation.
Click here to view the factor table.
Transcribed Image Text:Iggy Company is considering three capital expenditure projects. Relevant data for the projects are as follows. Life of Project Project Investment 22A $243,000 270,900 283,300 23A 24A Annual Income (a) $16,720 20,620 15,700 6 years 9 years 7 years Annual income is constant over the life of the project. Each project is expected to have zero salvage value at the end of the project. Iggy Company uses the straight-line method of depreciation. Click here to view the factor table.
Determine the internal rate of return for each project. (Round answers 0 decimal places, eg 13%. For calculation purposes, use 5 decimal
places as displayed in the factor table provided)
Project
22A
23A
24A
Internal Rate of
Return
%
%
%
(b)
If Iggy Company's required rate of return is 11%, which projects are acceptable?
The following project(s) are acceptable
Transcribed Image Text:Determine the internal rate of return for each project. (Round answers 0 decimal places, eg 13%. For calculation purposes, use 5 decimal places as displayed in the factor table provided) Project 22A 23A 24A Internal Rate of Return % % % (b) If Iggy Company's required rate of return is 11%, which projects are acceptable? The following project(s) are acceptable
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