You have been asked to analyze two investment proposals, A and B. Project A's cost is RM80,000 and the project's B cost is RM100,000. Cash flows for both projects are as follows, and the required rate of return is 10%. Year Cash Flows (RM) Cash Flows (RM) A В 1 20,000 25,000 25,000 25,000 2 25,000 3 20,000 4 25,000 25,000 5 30,000 25,000 Based on the above information, calculate for A and B, the: iii. Internal Rate of Return (using interpolation)
You have been asked to analyze two investment proposals, A and B. Project A's cost is RM80,000 and the project's B cost is RM100,000. Cash flows for both projects are as follows, and the required rate of return is 10%. Year Cash Flows (RM) Cash Flows (RM) A В 1 20,000 25,000 25,000 25,000 2 25,000 3 20,000 4 25,000 25,000 5 30,000 25,000 Based on the above information, calculate for A and B, the: iii. Internal Rate of Return (using interpolation)
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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Calculate IRR
Transcribed Image Text:You have been asked to analyze two investment proposals, A and B. Project A's cost
is RM80,000 and the project's B cost is RM100,000. Cash flows for both projects are
as follows, and the required rate of return is 10%.
Year
Cash Flows (RM)
Cash Flows (RM)
A
В
1
20,000
25,000
25,000
25,000
2
25,000
3
20,000
4
25,000
25,000
5
30,000
25,000
Based on the above information, calculate for A and B, the:
iii.
Internal Rate of Return (using interpolation)
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