Iggy Company is considering three capital expenditure projects. Relevant data for the projects are as follows. Project Investment 22A 23A 24A Project 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 PV table. (a) 22A $240,100 270,100 280,100 Determine the internal rate of return for each project. (Round answers 0 decimal places, e.g. 13%. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) 23A Annual Life of Income Project $16,700 6 years 24A 20,600 9 years 15,700 7 years 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
Iggy Company is considering three capital expenditure projects. Relevant data for the projects are as follows. Project Investment 22A 23A 24A Project 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 PV table. (a) 22A $240,100 270,100 280,100 Determine the internal rate of return for each project. (Round answers 0 decimal places, e.g. 13%. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) 23A Annual Life of Income Project $16,700 6 years 24A 20,600 9 years 15,700 7 years 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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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
Transcribed Image Text:Iggy Company is considering three capital expenditure projects. Relevant data for the
projects are as follows.
Project Investment
22A
23A
24A
Project
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 PV table.
(a)
22A
$240,100
270,100
280,100
Determine the internal rate of return for each project. (Round answers 0 decimal
places, e.g. 13%. For calculation purposes, use 5 decimal places as displayed in
the factor table provided.)
23A
Annual Life of
Income Project
24A
$16,700
6 years
20,600 9 years
15,700 7 years
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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