### Internal Rate of Return - A California company is trying to determine the relative profitability of two alternative investments.

EXERCISE 18-16 California company is trying to determine the relative profitability of two alternative investments. Investment A requires an initial cash outlay of $10,000 and has a net present value of $500. Investment B requires an initial cash outlay of $2,000 and has a net present value of $150. Compute the profitability