Four alternative designs are being considered for a pet-exercising treadmillI. The company's MARR is 18%. The cash flows associated with each are givenin the following table.The JudasThe LancelotThe BellaThe Lilo$120,000$50,000$130,000$141,000$50,000$13,000$18,000Capital Investment$160,000Annual RevenuesAnnual Expenses$50,000$50,000$20,000$15,000$14,000$15,000$15,000Refurbish at EOY 5$23,000$4,000$23,000$4,000Market Value after 10 years$5,000IRR???21.8%21.6%17.7% Use the trial and error method combined with linear interpolation to solve for the IRR of The Judas design (to one decimal place, XX.X%). In yoursupporting work, clearly state why you chose each interest rate to try.

The Internal Rate of Return: The Internal Rate of Return or the IRR is a popular capital budgeting…

Use the trial and error method combined with linear interpolation to solve for the IRR of The Judas design (to one decimal place, XX.X%). In your supporting work, clearly state why you chose each interest rate to try.

Use the trial and error method combined with linear interpolation to solve for the IRR of The Judas design (to one decimal place, XX.X%). In your supporting work, clearly state why you chose each interest rate to try.

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

Four alternative designs are being considered for a pet-exercising treadmillI. The company's MARR is 18%. The cash flows associated with each are given
in the following table.
The Judas
The Lancelot
The Bella
The Lilo
$120,000
$50,000
$130,000
$141,000
$50,000
$13,000
$18,000
Capital Investment
$160,000
Annual Revenues
Annual Expenses
$50,000
$50,000
$20,000
$15,000
$14,000
$15,000
$15,000
Refurbish at EOY 5
$23,000
$4,000
$23,000
$4,000
Market Value after 10 years
$5,000
IRR
???
21.8%
21.6%
17.7%

Use the trial and error method combined with linear interpolation to solve for the IRR of The Judas design (to one decimal place, XX.X%). In your
supporting work, clearly state why you chose each interest rate to try.

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