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IRR Rate - The budget committee has received the following

4. The budget committee has received the following projects. They are mutually exclusive. The Company uses 10% as the rate of return.

Year Project A Project B
0 - 30,000 - 60,000
1 10,000 10,000
2 10,000 10,000
3 10,000 20,000
4 10,000 20,000
5 5,000 30,000
Total +20,000 +40,000
NPV +7,910 +15,820

What is the IRR for each?

Solution Preview

IRR Rate
4. The budget committee has received the following projects. They are mutually exclusive. The Company uses 10% as the rate of return.

Year Project A Project B
0 - 30,000 - 60,000
1 10,000 10,000
2 10,000 ...

Solution Summary

This solution is comprised of a detailed explanation to answer the IRR for each project.

$2.19