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    Capital Budgeting Models

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    A manufacturing firm is considering the mutually exclusive alternatives shown below. Determine which is a better choice at a MARR if 15% based on the IRR criterion.

    n Project A1 Project A2
    0 $(2,500) $(3,600)
    1 $1,600 $2,600
    2 $1,840 $2,200

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    Solution Preview

    Please refer attached file for better clarity of tables and formulas.

    IRR can be found by using IRR ...

    Solution Summary

    The solution chooses the better project by IRR method.