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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Question
Transcribed Image Text:The initial cost of Project X is $200,000 and its annual generated income is $49,000.
The initial cost of a Project Y is $450,000 and the annual generated income is
$117,000. If the service life is 8 years, what is the incremental internal rate of return?
A value between 20% and 21%
A value between 23% and 24%
A value between 22% and 23%
A value between 21% and 22%
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