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Sweet Acacia Company is considering two capital expenditures. Relevant data for the projects are as follows: Project Initial investment Annual cash inflow Life of project A $218,669 $42,000 7 years B $282,249 $49,010 9 years

Sweet Acacia Company is considering two capital expenditures. Relevant data for the projects are as follows: Project Initial investment Annual cash inflow Life of project A $218,669 $42,000 7 years B $282,249 $49,010 9 years

Essentials Of Investments
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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Sweet Acacia Company is considering two capital expenditures. Relevant data for the projects are as follows: Project Initial investment Annual cash inflow Life of project Salvage value A Project A $218,669 $42,000 7 years $0 Project B B $282,249 $49,010 Sweet Acacia Company uses the straight-line method to depreciate its assets. Calculate the internal rate of return for each project. (For calculation purposes, use 5 decimal places as displayed in the factor table provided, e.g. 1.25125. Round answers to O decimal places, e.g. 15%.) Click here to view the factor table. 9 years $0 Internal rate of return % %
Transcribed Image Text:Sweet Acacia Company is considering two capital expenditures. Relevant data for the projects are as follows: Project Initial investment Annual cash inflow Life of project Salvage value A Project A $218,669 $42,000 7 years $0 Project B B $282,249 $49,010 Sweet Acacia Company uses the straight-line method to depreciate its assets. Calculate the internal rate of return for each project. (For calculation purposes, use 5 decimal places as displayed in the factor table provided, e.g. 1.25125. Round answers to O decimal places, e.g. 15%.) Click here to view the factor table. 9 years $0 Internal rate of return % %
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