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    Internal rates of return on projects

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    1. Refer to the cash flows (projects A&B) in the table:
    a. If the opportunity cost of capital is 11percent, which of these projects is
    worth pursuing.
    b. Which project would you choose if the opportunity cost of capital were 16
    percent?
    c. What are the internal rates of return on projects A and B?
    d. What is the payback period of each project?

    Year Project A Project B
    0 ($200) ($200)
    1 80 100
    2 80 100
    3 80 100
    4 80.

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    Solution Preview

    1. Refer to the cash flows (projects A&B) in the table:
    a. If the opportunity cost of capital is 11percent , which of ...

    Solution Summary

    The solution gives the steps to compute the internal rates of return on projects and payback period.

    $2.19

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