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There are two projects under consideration by the Rainbow factory. Each of the projects will require an initial investment of $35,168 and is expected to generate the following cash flows First Year Second Year Third Year Total Alpha Project $23,000 $4,500 $60,000 Beta Project 23,500 27,594 58,594 A. Calculate the internal rate of return on both projects. Use the IRR spreadsheet function to calculate internal rate of return. % % $32,500 7,500 Alpha Project Beta Project B. Make a recommendation on which one to accept. Alpha

There are two projects under consideration by the Rainbow factory. Each of the projects will require an initial investment of $35,168 and is expected to generate the following cash flows First Year Second Year Third Year Total Alpha Project $23,000 $4,500 $60,000 Beta Project 23,500 27,594 58,594 A. Calculate the internal rate of return on both projects. Use the IRR spreadsheet function to calculate internal rate of return. % % $32,500 7,500 Alpha Project Beta Project B. Make a recommendation on which one to accept. Alpha

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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There are two projects under consideration by the Rainbow factory. Each of the projects will require an initial investment of $35,168 and is expected to generate the following cash flows: First Year Second Year Third Year Total Alpha Project $23,000 $4,500 $60,000 Beta Project 23,500 27,594 58,594 A. Calculate the internal rate of return on both projects. Use the IRR spreadsheet function to calculate internal rate of return. $32,500 7,500 Alpha Alpha Project Beta Project B. Make a recommendation on which one to accept. % %
Transcribed Image Text:There are two projects under consideration by the Rainbow factory. Each of the projects will require an initial investment of $35,168 and is expected to generate the following cash flows: First Year Second Year Third Year Total Alpha Project $23,000 $4,500 $60,000 Beta Project 23,500 27,594 58,594 A. Calculate the internal rate of return on both projects. Use the IRR spreadsheet function to calculate internal rate of return. $32,500 7,500 Alpha Alpha Project Beta Project B. Make a recommendation on which one to accept. % %
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