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There are two projects under consideration by the Rainbow factory. Each of the projects will require an initial investment of $35,017 and is expected to generate the following cash flows:   First Year Second Year Third Year Total Alpha Project $32,000   $22,000     $4,500   $58,500 Beta Project 8,000   24,000     27,106   59,106 A. Calculate the internal rate of return on both projects. Use the IRR spreadsheet function to calculate internal rate of return. Alpha Project fill in the blank 1% Beta Project fill in the blank 2% B. Make a recommendation on which one to accept

There are two projects under consideration by the Rainbow factory. Each of the projects will require an initial investment of $35,017 and is expected to generate the following cash flows:   First Year Second Year Third Year Total Alpha Project $32,000   $22,000     $4,500   $58,500 Beta Project 8,000   24,000     27,106   59,106 A. Calculate the internal rate of return on both projects. Use the IRR spreadsheet function to calculate internal rate of return. Alpha Project fill in the blank 1% Beta Project fill in the blank 2% B. Make a recommendation on which one to accept

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
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  1. There are two projects under consideration by the Rainbow factory. Each of the projects will require an initial investment of $35,017 and is expected to generate the following cash flows:

      First Year Second Year Third Year Total
    Alpha Project $32,000   $22,000     $4,500   $58,500
    Beta Project 8,000   24,000     27,106   59,106

    A. Calculate the internal rate of return on both projects. Use the IRR spreadsheet function to calculate internal rate of return.

    Alpha Project fill in the blank 1%
    Beta Project fill in the blank 2%

    B. Make a recommendation on which one to accept.

     

     

    .

     
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